The third quarter of calendar year 2006 was the worst for global outsourcing market

The third quarter of calendar year 2006 was the worst for global outsourcing market which shrank for the first time ever. The value of the outsourcing deals signed in third-quarter declined 15% to $4.5 billion against the same period last year, according to offshore advisory firm TPI. A larger number of single-process deals and shortening contract durations were the prime reasons behind the decline.
The Big Six providers -- (IBM, HP, CSC, Accenture, EDS, Capgemini) -- saw their share of the BPO market drop from 40% to 35%.

Besides, fewer multi-process contracts were signed in 2006 than in each of the past three years. According to TPI, to date, there have been seven multi-process contracts, compared with 20 in 2004, and 11 in 2005. By total contract value (TCV), multi-process contracts account for only 10% year-to-date, compared with 24% in 2004 and about 12% in 2005.