2014 americas #isgsic welcome and market update

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Welcome Service Providers …

Welcome!

… and law firm attendees

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ISG 2014 Sourcing Industry Conferences

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

October 9 Europe – London,

October 20-21

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Just ask …

Lindsay Bookout Carol Goode Marilyn Hopkins Ellen Rosof Megan Zamary

Event Management

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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.

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Time to disrupt your

business before the

business disrupts you

Avoid the success trap

2010

$71.8B

2014

$80.9B

Global Outsourcing Spend

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Technology driven disruption

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Amazon Borders

Uber Square

Duolingo

Yplan Airnb

Who will disrupt our industry?

Netflix Blockbuster

Apple RIM / Kodak/Music

Exploring the success trap

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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

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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

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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

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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

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Top 20 service providers

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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

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Social Media Limited Industry

Platform Solutions

Multi-Sourcing

Future market trends

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Replacement Automation

Continuous Contracting

Enterprise Analytics

Service Integration

Internet of Things

Crowd Sourcing

Outcome-based Pricing

Hyperscaled Data Centers

Global Business Services

Automation benefits

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Productivity and efficiency

Accuracy

Cost savings

Compliance

Scalability and flexibility

Who oversees analytics?

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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

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What does it mean?

What happened?

Analytics

Decision Support Forecasting Optimization

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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

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

RFID tags for facilitating routing, inventorying & loss

prevention

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

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

management

Supply-Chain Helpers

Vertical-Market Apps

Physical World Web

Ubiquitous Positioning

2000 2010 2020 Time

The Internet of Things

Locating people & everyday objects, wearable devices

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

Road map of technology and data

Supply-Chain Helpers

Vertical-Market Apps

Physical World Web

Ubiquitous Positioning

2000 2010 2020 Time

The Internet of Things

Teleoperation & telepresence. Ability to

monitor & control distant objects

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

Road map of technology and data

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

>

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>

Regardless of disruption…

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price

service selection

experience delivery

convenience

…some things never change

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