January to December 2016

It gives me great pleasure to bring to you the year-end 2016 edition of the KPMG Global IT-BPO Outsourcing Deals Analysis.  

Key highlights: 

• 2016 witnessed a drop in deal activity as compared to 2015. There was a decrease of 28 percent in total contract value but a 21 percent increase in total number of deals in 2016 as compared to 2015
  
• In 2016, 951 ITO contracts worth USD102.4 billion and 81 BPO contracts worth USD8.7 billion were signed, worldwide
  
• Globally 45 IT-BPO bundled deals were signed in 2016 with aggregate contract value worth USD3.9 billion
  
• In terms of value, approximately 64.7 percent of deals originated from the United States, followed by the United Kingdom at 9.2 percent. Australia and France were two other key outsourcing markets
• The average deal tenure increased to 4 years 7 months in 2016 from 4 years 1 month in 2015
  
• Government and Defense sectors were the top consumers of IT-BPO services contributing to 55 percent and 13 percent in terms of value of outsourcing deals signed in 2016. Telecom sector was the next big contributor in terms of deal value
  
• IT Bundled Services and SCM contributed approximately USD63.2 billion and USD3.6 billion respectively and were the largest procured services globally within ITO and BPO services, respectively
  
• Average annualized contract value in 2016 was USD21.3 million as compared to USD43.5 million in 2015 showing a decrease of 51 percent between the two years.
  

Click here to view the Infograph.

If you have any questions or comments on the newsletter or would like more information regarding the SSOA practice, please get in touch with Kartik Ramakrishnan or GO-FM IT-BPO Deals Team