TPI, the largest sourcing data and advisory firm in the world has released a new report entitled ‘TPI Momentum 2009 Market Trends & Insights Vertical Industries’ The report presents a comprehensive look at outsourcing activity in 26 key sectors of the US economy.
The sectors covered in the report correspond with the widely used Forbes categories. For each vertical, the report documents information on 20 different IT outsourcing (ITO) and business process outsourcing (BPO) functions and provides analysis gleaned from the TPI experience of providing expert advisory services in more than 3,000 transactions. Within and across these segments, it shows how client buying patterns have shifted over time, by region, scope and service provider.
"With our global footprint and 360-degree view of the outsourcing industry, TPI is offering objective and concise intelligence that isn't available anywhere else," said Melany Williams, Partner and Managing Director, TPI Momentum. "This report will help all participants in the sourcing industry to uncover pockets of opportunity and align business development efforts with real-world market demand. If you're trying to decide where to focus your sales resources, you need this report."
Among the key findings were:
• Of the 26 industries studied, nine are identified as being strong verticals for prospecting activities. Among these, the Media industry has recently seen strong adoption of outsourcing among mid-market companies as well as increasing spending levels among companies with active ITO / BPO contracts. This recent increase in outsourcing activity is likely to continue as Media companies face significant market pressure and seek opportunities for short-term cost savings.
• In terms of the number of companies represented, the Aerospace & Defense sector is the smallest of the 26 industries classified by Forbes, yet it remains a strong market for outsourcing. In fact, 68 percent of the companies within this space have an active outsourcing contract with a total contract value (TCV) of $25 million or more -- the highest percentage of all verticals studied. Outsourcing activity is likely to be affected in the coming months due to a variety of changes in the sector including acquisition reform, an expected labour shortage and forecasted 2010 U.S. government budget cuts.
• TPI has observed that the larger companies in the Consumer Durables space tend to be experienced outsourcers. Because these companies have been hit particularly hard by the reduction in consumer spending, they are likely to seek outsourcing opportunities in areas they have not strongly considered in the past. When making outsourcing decisions, TPI has observed that Consumer Durables companies are increasingly focused on the long-term financial viability of the service providers considered, adding another layer of complexity to the selling process.
