IT Outsourcing: Highest Contract Deals Ever

The world of IT outsourcing today has reached its strongest performance within the decade, says a leading IT research firm. From January-June this year, 282 IT outsourcing contracts reached the value of  over $49 billion in total contract value (TCV), and $10 billion in annualized contract value (ACV) or the value of a contract divided by its period.

According to TPI, the largest data source and advisory firm in the world, the IT outsourcing industry marks a record in the business industry during the first quarters of the present calendar year. TPI, a division of US-based Information Services Group Inc. (ISG), tracks a commercial contract that has values reaching to more than $25 million.

According to the latest TPI Index, the recently-completed second quarter report produced significant market strength and a solid route for growth during the residue of the year. One hundred forty-six contracts were awarded in the global outsourcing industry, which are projected to be at the value of $25.6 billion in TCV and almost $5 billion in ACV in the second quarter.

The three measures point out a notable market strength as this was the strongest second quarter performance since 2000. In addition, each of the past three quarters has topped the $20 billion TCV mark. This series signifies the best three consecutive quarter performance ever.

The industry has witnessed the highest number of outsourcing contracts, TCVs and ACVs during the first half of 2008 in more than 10 years. At the average of the year, TCVs in the broader market is on a trajectory to conceal the TCV record of 2004, which has been the most productive full year to date.

The first half of the year has been concluded to be one of the strongest within more than a decade. This feat is credited to the 282 contracts worth nearly $49 billion in TCV, and nearly $10 billion in ACV, that were awarded in the first half of 2008. The said contracts yielded a fast year-over-year increase of 24% by TCV and 36% in ACV.

This indicates that the outsourcing industry is continuously increasing despite the difficulties that it is facing today.