Trends in BPO Deal Activity, 2005 Versus 2004: Preliminary Results

This IDC study provides a comparative view of 2004 and 2005 business outsourcing deal activity. Using information that IDC gathered from business outsourcing vendors themselves, and additional information collected from vendor Web sites and other industry sources, this study examines key differences, growth patterns, major trends, and characteristics of these deals and identifies how business outsourcing deal activity continues to evolve.

The study presents IDC's analysis of the BPO and processing services deals captured in IDC's Services Contracts Database ? a database that tracks outsourcing deal activity. This document compares 2005 business outsourcing activity with 2004 and looks specifically at the distribution of deals by business process, deal size, industry, and geographic scope. The document also examines the key characteristics and trends surrounding the top 20 business outsourcing deals in 2005 compared with 2004.

"The business outsourcing market saw healthy growth in deal activity in 2005," said Romala Ravi, director with IDC's BPO Services research program. "While the smaller size of megadeals signed in 2005 caused overall TCV to drop, the majority of the market, comprising large, midsize, and small deals, progressed forward steadily, reflecting growing and more widespread acceptance of business outsourcing. Megadeals were observed to be the exception rather than the norm in this vibrant market, while small and midsize deals captured a greater share of market activity."