2008 in review: Ups and downs

Just as I did last year, with the sourcing market results in for the full year, it's worth considering how things have gone in the Asia-Pacific region and around the world.

The headlines as reported by TPI are:

• With a Global TCV of nearly US$90 billion, 2008 value exceeded 2007 by 5.6 percent


• Global ACV reached a record high of US$17.6 billion--a 9.5 percent increase over 2007

2008 was also the "tale of two halves". Global TCV for the second half of 2008 was one of the lowest on record, driven primarily by a decline in mega-deals, those deals with a TCV of US$1 billion or above.

Geographically, 2008 saw some big differences between the Americas, EMEA and Asia-Pacific across 2008.

• The Americas TCV was essentially flat first half 2008 to second half 2008.


• EMEA recorded almost a 50 percent drop in TCV in the second half compared to the first half, admittedly coming off an incredibly strong first-half


• Asia-Pacific recording almost a tripling of TCV in the second half compared to the first half, coming off a rather weak first half.

If you recall my blog on the half-year results, I commented on the following:

• Historically, outsourcing has been a widely-used management tool in times of economic strength and economic weakness, whereas in times of economic uncertainty the outsourcing market has been more subdued. If we step back and think about the Asia-Pacific region at a macro level, there have been a number of questions over the last six to nine months regarding whether the financial challenges in the U.S. will be exported to the region--essentially we've been in an uncertain market.


• As the sentiment has shifted that the Asia-Pacific region will have to react to a period of some economic weakness, the question is then, will the second half of 2008 see a spurt of deals that results in the full-year figures reach the 2006 or 2007 levels. Certainly the suppliers of services will be looking for that.

Those comments certainly held true in the second half of the year, didn't they?

The question is what will happen now in 2009. I think I better leave that for next week.

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Michael Rehkopf

Michael has more than 20 years of experience in operations, strategy and sourcing covering all major parts of the globe. He has also worked for Australian, Canadian, German and Japanese companies in both business process outsourcing and IT outsourcing.
Michael's industry experience includes the financial services, manufacturing, telecommunications and travel sectors. He leverages this diverse industry experience and his university background in accounting, IT and his Master of Dispute Resolution, to assist clients in the development of business strategies and the implementation of sourcing strategies. These include the associated evaluation, negotiation and organizational change.
Michael is currently a partner at TPI, the world's oldest and largest sourcing advisory firm. Prior to joining TPI, Michael held leadership positions with Siemens Business Services, OpenPlus International, Mitsubishi Electric and Netron.