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== Outsourcing ==
== Outsourcing ==


=== ISG Index ===
=== <big>ISG Index</big> ===


==== Q1 2023 ====
==== <big>Q1 2023</big> ====
Data from the ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more<ref>https://ir.isg-one.com/news-market-information/press-releases/news-details/2023/Global-Spending-on-IT-and-Business-Services-Down-8-in-Q1-ISG-Index-Finds/default.aspx</ref><ref>https://isg-one.com/docs/default-source/default-document-library/1q23-isg-index-presentation.pdf?sfvrsn=4439d631_0</ref>
Data from the ISG Index, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more<ref>https://ir.isg-one.com/news-market-information/press-releases/news-details/2023/Global-Spending-on-IT-and-Business-Services-Down-8-in-Q1-ISG-Index-Finds/default.aspx</ref><ref>https://isg-one.com/docs/default-source/default-document-library/1q23-isg-index-presentation.pdf?sfvrsn=4439d631_0</ref>


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“The macro environment remains uncertain, with interest rates, inflation and trouble in the banking sector topping concerns for enterprise clients,” said Hall. “There continues to be more scrutiny on deal signings, especially in  discretionary spending areas. Enterprises are revisiting cost optimization, efficiency gains and vendor consolidation deals.”
“The macro environment remains uncertain, with interest rates, inflation and trouble in the banking sector topping concerns for enterprise clients,” said Hall. “There continues to be more scrutiny on deal signings, especially in  discretionary spending areas. Enterprises are revisiting cost optimization, efficiency gains and vendor consolidation deals.”


==== Q2 2023 ====
==== <big>Q2 2023</big> ====


Data from the ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show second-quarter ACV for the combined global market – both cloud-based as-a-service (XaaS) and managed services – was $22.7 billion, down 9 percent from the prior year – the third straight quarter the market has seen a year-over-year decline.[[File:Screenshot 2023-07-28 141831.png|center|thumb|506x506px|https://assets.swoogo.com/uploads/2741432-64b10de85d3d9.pdf]]
Data from the ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show second-quarter ACV for the combined global market – both cloud-based as-a-service (XaaS) and managed services – was $22.7 billion, down 9 percent from the prior year – the third straight quarter the market has seen a year-over-year decline.[[File:Screenshot 2023-07-28 141831.png|center|thumb|506x506px|https://assets.swoogo.com/uploads/2741432-64b10de85d3d9.pdf]]
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“We also noted that interest rates have risen more in the past year than in the previous 30, which may dampen big infrastructure investments. But the difficult comps will soon be behind us, and excitement is growing around generative AI. That could provide a much-needed tailwind for cloud services.”
“We also noted that interest rates have risen more in the past year than in the previous 30, which may dampen big infrastructure investments. But the difficult comps will soon be behind us, and excitement is growing around generative AI. That could provide a much-needed tailwind for cloud services.”


=== Deloitte Survey ===
==== <big>Q3 2023</big> ====
[[File:Screenshot 2023-11-02 095137.png|center|thumb|834x834px|https://isg-one.com/docs/default-source/default-document-library/3q23-isg-index-presentation.pdf?sfvrsn=a65d431_4]]
 
 
Data from the ISG Index™, which measures commercial outsourcing contracts with annual contract value (ACV) of $5 million or more, show third-quarter ACV for the combined global market (both XaaS and managed services) at $23.1 billion, down 3 percent versus the prior year. It was the fifth straight quarter the combined market has declined year over year, although the rate of decline slowed this quarter.<ref>https://ir.isg-one.com/news-market-information/press-releases/news-details/2023/Cost-Optimization-Drives-Record-Demand-for-Managed-Services-in-Q3-ISG-Index-Finds/default.aspx</ref>
 
* Combined market ACV for the first nine months was down 7 percent, to $70.0 billion, the first down market for this period since 2015, after averaging 21 percent growth over the previous five years.
* Within managed services, spending on IT outsourcing (ITO) climbed 17 percent, to $8.2 billion, fueled by 28 percent growth in application development and maintenance services. Business process outsourcing (BPO), meanwhile, fell 6 percent, to $2.1 billion, as spending slowed on customer engagement, procurement and engineering, research and development (ER&D) services.
 
{| class="wikitable"
!Segment<ref>https://ir.isg-one.com/news-market-information/press-releases/news-details/2023/Cost-Optimization-Drives-Record-Demand-for-Managed-Services-in-Q3-ISG-Index-Finds/default.aspx</ref>
!ACV (B)
!Q/Q
!YTD
!Y/Y
|-
|'''Combined  Market'''
|'''23.1'''
|'''1.76%'''
|'''-7%'''
|'''-300%'''
|-
|'''Managed Services'''
|'''10.4'''
|'''4.00%'''
|'''6%'''
|'''11%'''
|-
| - ITO
|8.2
|6.49%
|14%
|17%
|-
| - BPO
|2.1
| -8.70%
| -12%
| -6%
|-
|'''XaaS'''
|'''12.8'''
|'''1.59%'''
|'''-16%'''
|'''-13%'''
|-
| - IaaS
|9
|3.45%
| -19%
|
|-
| - SaaS
|3.8
| -2.56%
| -6%
|8%
|}
'''2023 Forecast'''
 
'''ISG raised its forecast for managed services growth by 40 basis points, to 5.4 percent for the year, and maintained its forecast for XaaS revenue growth in 2023 at 11.5 percent.'''<blockquote>“From a macroeconomic perspective, we've seen modest improvement in decision making and increased spend, but global interest rates remain high and concerns persist with energy prices, a strong dollar, and the expectation of a prolonged period of high interest rates,” Hall said.
 
“Clients continue to restructure their IT landscape to adopt to multi-cloud environments and hybrid work arrangements, and are beginning to experiment with enterprise-grade GenAI use cases. We expect the applications market to continue to expand in 2024.”</blockquote>
 
=== <big>Deloitte Survey</big> ===


* Acquiring talent is a top internal challenge. 53% of surveyed executives reported increased staff levels over the last two years to match strategic organizational priorities.<ref>https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-global-outsourcing-survey-2022.pdf</ref>
* Acquiring talent is a top internal challenge. 53% of surveyed executives reported increased staff levels over the last two years to match strategic organizational priorities.<ref>https://www2.deloitte.com/content/dam/Deloitte/us/Documents/process-and-operations/us-global-outsourcing-survey-2022.pdf</ref>
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* Two years ago, 70% of surveyed executives indicated cost was a primary reason for outsourcing.6 Today, while cutting costs ranks within the top four primary drivers for engaging Operate and Managed Services, it is overshadowed by access to new capabilities, business and operating model shifts, and keeping up with technology and regulation.
* Two years ago, 70% of surveyed executives indicated cost was a primary reason for outsourcing.6 Today, while cutting costs ranks within the top four primary drivers for engaging Operate and Managed Services, it is overshadowed by access to new capabilities, business and operating model shifts, and keeping up with technology and regulation.


=== Outsourcing 2008-2009 Recession ===
=== <big>Outsourcing 2008-2009 Recession</big> ===
According to IDC, BPO '''contract values peaked in 2008 in most industries''', especially government, manufacturing and financial services. There was a '''decline in total contract value of new and renewed contracts in 2009 and 2010''' due to the economic recession. Underlying the decline is a '''significant reduction in "mega deals" of more than $1 billion in 2009 and 2010 compared to the prior years''' covered in the study. The financial services sector, which had two significant mega deals in 2008, appears to be returning to pre-recession contract activity levels, though deals are trending shorter and smaller in size.  
According to IDC, BPO '''contract values peaked in 2008 in most industries''', especially government, manufacturing and financial services. There was a '''decline in total contract value of new and renewed contracts in 2009 and 2010''' due to the economic recession. Underlying the decline is a '''significant reduction in "mega deals" of more than $1 billion in 2009 and 2010 compared to the prior years''' covered in the study. The financial services sector, which had two significant mega deals in 2008, appears to be returning to pre-recession contract activity levels, though deals are trending shorter and smaller in size.  


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* '''Salaries are generally trending up as well.'''  In January 2009 at customer organizations, 21 percent had seen salary increases during the previous 12 months as compared to only 10  percent with salary decreases.  By January 2010, these numbers had shifted even higher, with 28 percent reporting salary increases during the previous 12 month period and only 5 percent reporting salary decreases.  The story is much the same at provider and advisor organizations.
* '''Salaries are generally trending up as well.'''  In January 2009 at customer organizations, 21 percent had seen salary increases during the previous 12 months as compared to only 10  percent with salary decreases.  By January 2010, these numbers had shifted even higher, with 28 percent reporting salary increases during the previous 12 month period and only 5 percent reporting salary decreases.  The story is much the same at provider and advisor organizations.


=== Offshore Outsourcing ===
=== <big>Offshore Outsourcing</big> ===


==== World Bank Research ====
==== World Bank Research ====
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