New Research Identifies Key Trends Driving Outsourcing Market Competition

STAMFORD, Conn., April 14, 2011 /PRNewswire/ -- TPI, an Information Services Group company (ISG) (NASDAQ: III) and the leading independent data and sourcing advisory firm in the world, today released a new research report detailing the key trends driving competition among service providers for outsourcing contracts.

The TPI Momentum(SM) Market Trends & Insights 2010 Annual Report reveals that outsourcing activity last year was heavily influenced by the emergence of Cloud Computing technology, client preferences for multisourcing and an unprecedented level of expiring outsourcing contracts in the market. The result was intense competition for awards despite smaller values and shorter durations, conditions that are likely to continue throughout 2011.

"2010 was not a growth year for many segments of the industry," said Paul Reynolds, Chief Research Officer of TPI Momentum. "For service providers to increase pipelines and improve profitability in 2011, they will need an accurate reading of current client preferences and market trends, an appropriate strategy to respond and disciplined execution in the face of strong competition.

"This report provides the information they need to understand the size and scope of opportunity in the global outsourcing market."

Using data from the TPI Index and other unique sources as well as insight from TPI advisors around the world, the TPI Momentum Market Trends & Insights 2010 Annual Report documents outsourcing contract spending around the world, projects 2011 spending and contract trends, analyzes changes in the competitive landscape and reports on important captive center developments.

According to the report, many clients expect to adopt Cloud Computing in the near future and want Cloud provisions written into outsourcing contracts. Meanwhile, service providers continue to formulate and fine-tune their Cloud-based services, and to seek acquisition targets that can enhance their Cloud portfolios.

But the outsourcing market remains crowded and competitive. For the first time, more than half of clients who spend more than $50 million annually on outsourcing employ two or more service providers. Shortening contract lengths have also caused a dramatic increase in restructuring activity, which reached historical highs in 2010. A record nearly 500 outsourcing contracts expired in 2010 and over 500 more are due to expire this year.

Additional information presented in the TPI Momentum Market Trends & Insights 2010 Annual Report includes:

• Overviews of the total number of outsourcing contracts awarded and total spending in 2010, with breakouts for IT and business process outsourcing, geographic regions, vertical industries, client company sizes, service provider market share and more
• A new chapter dedicated to multisourcing, including documentation of client trends, industries where it is most prevalent and tips for service providers wanting to position themselves favorably
• A new chapter on Cloud Computing, featuring exclusive TPI research on client attitudes, current strategy and service needs and adoption plans for specific functions and models
• A strategic summary of service provider M&A activity in 2010 and the 2011 outlook
• Advisor insight into client attitudes toward captive operations

For more information, visit http://www.tpi.net/resources/service_providers/TPIMomentum.html or contact Paul Reynolds ([email protected]).

About TPI

TPI, an Information Services Group company, is the founder and innovator of the sourcing advisory industry and the leading independent data and sourcing advisory firm in the world. We are expert at a broad range of business support functions and related research methodologies. Utilizing deep functional domain expertise and extensive practical experience, our accomplished industry experts collaborate with organizations to help them advance their business operations through the best combination of business process improvement, shared services, outsourcing and offshoring. In 2010, the International Association of Outsourcing Professionals ranked TPI no. 1 in its Global Outsourcing 100: World's Best Outsourcing Advisors. For additional information, visit www.tpi.net.

About Information Services Group

Information Services Group Inc. (ISG), founded in 2006, is a leading technology insights, market intelligence and advisory services company. ISG has three go-to-market brands: TPI, the leading independent data and sourcing advisory firm in the world; Compass, the premier independent global provider of business and information technology benchmarking, performance improvement, data and analytics services; and STA Consulting, a premier independent information technology advisor serving the public sector. The company has nearly 700 professionals and operates in 21 countries. Based in Stamford, Conn., ISG has a proven leadership team with global experience in information-based services and a track record of creating significant value for shareowners, clients and employees. For additional information, visit www.informationsg.com.

SOURCE TPI