2014 Americas #ISGSIC Welcome and Market Update

© 2014 Information Services Group, Inc. All Rights Reserved

Welcome Service Providers …

Welcome!

… and law firm attendees


ISG 2014 Sourcing Industry Conferences

Americas – Dallas, September 29-30 India – Bangalore,

October 9 Europe – London,

October 20-21


Just ask …

Lindsay Bookout Carol Goode Marilyn Hopkins Ellen Rosof Megan Zamary

Event Management


Keep the conversation going …

Monday: 3:00 – 3:30: Sue Danino, Todd Dreger, Esteban Herrera 5:00 – 5:30: Harvey Gluckman, Steve Hall, Stanton Jones Tuesday: 8:00 – 8:30: Clay Calhoun, Al Denis, Paul Reynolds 10:15 – 10:45: Jeff Croyle, Hack Heyward, Ray Shehata

Coffee talk

Join us on our LinkedIn group for Sourcing

Industry Service Providers

[http://ow.ly/BSSh0] and at @isg_news on

Twitter, #ISGSIC.


Time to disrupt your

business before the

business disrupts you

Avoid the success trap

2010

$71.8B

2014

$80.9B

Global Outsourcing Spend


Technology driven disruption


Amazon Borders

Uber Square

Duolingo

Yplan Airnb

Who will disrupt our industry?

Netflix Blockbuster

Apple RIM / Kodak/Music

Exploring the success trap


ACV ($B) $15.2 $21.2 $18.7

New Scope $10.1 $14.3 $11.2

Restructure $5.1 $6.9 $7.5

2006 2010 2013

35% 9%

‘06-’10 ‘10-’13

42% -22%

39% -12%

Percentage Change ACV

Exploring the success trap


ACV ($B) $15.2 $21.2 $18.7

New Scope $10.1 $14.3 $11.2

Restructure $5.1 $6.9 $7.5

2006 2010 2013

35% 9%

‘06-’10 ‘10-’13

42% -22%

39% -12%

Percentage Change ACV

96% 52%

‘06-’10 ‘10-’13

53% 6%

62% 18%

Percentage Change Counts

Source: ISG Research-Contracts Database. ACV = Annual Contract Value for the contacts awarded in that year greater than $25M

$21.0 $30.1

$21.4

54 55 57

2005 2010 2013

ACV ($B) ITO # SPs ITO

$3.7 $2.1 $2.9

26 30 29

2005 2010 2013

ACV ($B) BPO # SPs BPO


Global competition at $25M+

Global competition at $5M+

Source: ISG Research-Contracts Database. ACV = Annual Contract Value for the contacts awarded in that year greater than $5M

$24.6 $36.4 $29.8

96 115

140

2005 2010 2013

ACV ($B) ITO # SPs ITO

$5.6 $5.3 $6.2

79 83

127

2005 2010 2013

ACV ($B) BPO # SPs BPO


4.5 4.7 4.2 4.1 3.9

2000 2005 2008 2010 20130.0

1.0

2.0

3.0

4.0

5.0

$0

$50

$100

$150

$200

$250

$300

Average Duration in Years Average TCV ($M)

Duration pressure continues

Source: ISG Research-Contracts Database © 2014 Information Services Group, Inc. All Rights Reserved

Has the win rate for service provider’s on competitive transactions gone up or down since 2010? • Up • Down • Stayed the same


Top 20 service providers


Note: Per 100 ISG Invitations

Win Rate 13% 20%

ISG Invitations

High

Average

Low

46% 42%

2010 2013

19% 14%

3% 1%

Multi-sourcing leveling off

48% 49% 56% 65%

27% 24% 24%

21% 14% 11%

11% 8%

2013201020052000

1 SP

2 SP's

3 SP's

4 SP's

5+ SP's

Note: ITO Contracts>USD25M+; 2013 Forbes Global 2000 company contracts considered

2000 2005 2010 2013 © 2014 Information Services Group, Inc. All Rights Reserved

Current market trends

Complimentary Automation

Silo’d Analytics Mobility/BYOD

As-A-Service


Social Media Limited Industry

Platform Solutions

Multi-Sourcing

Future market trends


Replacement Automation

Continuous Contracting

Enterprise Analytics

Service Integration

Internet of Things

Crowd Sourcing

Outcome-based Pricing

Hyperscaled Data Centers

Global Business Services

Automation benefits


Productivity and efficiency

Accuracy

Cost savings

Compliance

Scalability and flexibility

Who oversees analytics?


9%

18%

15%

5%

5%

23%

4%

20%

CFO

CIO

CMO

Other C-Suite Execs

CEO

Business Unit

CAO

Multiple

Analytics Majority of Outsourcing Today

What information do

we have?

Data Content Reporting


What does it mean?

What happened?

Analytics

Decision Support Forecasting Optimization


What actions are needed?

How is it all connected?

What is happening now?

What’s the best that can happen?

Outsourcing Tomorrow

Supply-Chain Helpers

Vertical-Market Apps

Physical World Web

Ubiquitous Positioning

2000 2010 2020 Time

The Internet of Things

Data Source: SRI Consulting Business Intelligence © 2014 Information Services Group, Inc. All Rights Reserved

Road map of technology and data



Physical World Web


2000 2010 2020 Time




RFID tags for facilitating routing, inventorying & loss

prevention



Physical World Web


2000 2010 2020 Time




Surveillance, security, healthcare, transport, food safety, document

management



Physical World Web


2000 2010 2020 Time


Locating people & everyday objects, wearable devices





Physical World Web


2000 2010 2020 Time


Teleoperation & telepresence. Ability to

monitor & control distant objects



Attack the supply chain

Retail Store

• Inventory errors • Out-of-stocks • Costly markdowns • Theft • Expensive receiving

Distribution

• Receiving & packing errors

• Int’l shipments • Supply Chain visibility • Complex Cross-docking

Vertical Based Solutions (Retail example)

Sourced Production

• Outsourced, overseas manufacturing

• Packing & shipping errors

• Manufacturing variances

>


>

Regardless of disruption…


price

service selection

experience delivery

convenience

…some things never change
