Monday 20th July,2015

According to the latest Outsourcing Index™ by Information Services Group (ISG), contracting activity in the global outsourcing industry surged to all-time highs in the second quarter and first half, even as the annual value of those contracts declined.

The index, shows a record 451 contracts were signed in the second quarter, along with a high of 754 agreements in the first half, despite the lackluster during the first quarter.

The sharp increase in activity comes as buyers continue to negotiate more deals at lower value, not only to take advantage of specialised services offered by smaller, niche providers, but also to avoid being locked into large, long-term contracts at a time when a wave of new technologies and operating models is causing significant disruption and uncertainty in the services industry.

"The market continues to push into new territory with record volumes of global outsourcing adoption. In fact, three of the past four halves have logged the highest counts ever,” said ISG President and Partner John Keppel.

"Technology has changed significantly during this period, which saw the beginning of the Digital As-a-Service revolution and its continuing pervasive impact on the global services market."

Added Keppel, "It’s particularly noteworthy that ACV rallied from a dismal first quarter to pass the $6 billion mark without any significant aid from mega-relationships this quarter. The second quarter had only two deals with ACV greater than $100 million, a low not seen in many years. Clearly, it’s the size of the demand, not the size of the deal, that is driving this market."

The ISG Outsourcing Index™ measures commercial outsourcing contracts with annual contract value (ACV) of $5 million and above.