Taras Kytsmey, Global Outsourcing Trends 2010

1. Global Outsourcing Trends:Vision for 2010 Taras Kytsmey

2. The trend called “outsourcing” become an industry in itself with almost unrealistic growth and maturity.

3. 2009 In 2009, cost cutting was one of the most influential drivers in the outsourcing market.

4. Global outsourcing market in numbers - 2009 In the 4th quarter of 2009, the global outsourcing market had its best performance in six quarters. Slow but steady recovery as businesses commit to long-term strategies to reduce costs and streamline operations.“ The outsourcing market's total contract value reached $24.7 billion in Q4 2009, up 8 percent year-over-year. The total contract value in the IT outsourcing category increased 54 percent over the prior quarter and 32 percent over a year ago, reaching $19 billion, the highest quarterly total in six years. For the year, the market produced $56 billion in total contract value, flat with 2008. BPO continued to struggle in the fourth quarter of 2009. Q42009 remained 33 percent below Q42008.For 2009, the BPO market's total contract value fell 38 percent to $18.5 billion, its lowest level since 2001.

5. Global Sourcing Trends in 2010 Rates of outsourcing pricing declines are expected to slow. Sourcing providers are not likely be as accommodating as they were last year. Market activity in 2010 should be busier, as many outsourcing projects were put on hold in 2009. There is likely to be a continuation of shorter deals, shorter procurement processes and an emphasis on "making things work rather than engaging in complex strategies." Do-it-yourself sourcing by internal teams will continue, with less reliance on consultant/advisory firms while favoring incumbent suppliers.

6. 2010 Global Outsourcing Trends Transformers 2."Optimization is the new transformation“ - move in pragmatic, incremental steps and focus on achieving best in class, standardized and optimized delivery models . If at First You Don't Succeed, Renegotiate.Investment is being made in ensuring existing suppliers and internal processes are delivering optimum value Multi-Sourcing Malaise.In theory-work with best-in-class IT service providers and keep costs in check, thanks to the competition. In reality, it's been difficult at best and disastrous at worst for many customers. Captive No More? While certain companies will continue to set up fully-owned IT delivery centers abroad, look for more captive center divestitures in the new year and a "marginally lower" number of new captives being set up

7. 2010 Global Outsourcing Trends The Urge to Merge. The number of top-tier service providers shrunk this year, creating both challenges and opportunities for other vendors in 2010. Examples: HP, EDS, Dell, Perot, ACS and Xerox. Everest predicts that most consolidation in 2010 will focus on acquisitions of "adjacent and complementary capabilities across functions, verticals and geographies," as opposed to mergers solely to increase scale. The Mega-Death of Mega-Deals. Increased near-term cost pressures will drive a continued decline in mega-deals in 2010. The Public Interest.All signs point to increased outsourcing in local and state government. "Budgets are tight, but demands for new technologies are strong. The (Slow) Return of the Discretionary Spend. Projects will make a gradual recovery in 2010, predicts Everest, noting that "the pace of this change will be dictated entirely by the improvement in the global business environment." Semi-Sourcing - Cloud computing and software-as-a-service-which. Traditional deals will continue to decrease during the next several years as new utility and cloud service offerings proliferate.

8. Customer Dissatisfaction Factors Gartner Says Customer Satisfaction is Key When Determining Offshore Outsourcing Options Four factors have been identified as the main contributors to the customer dissatisfaction: Client knowledge High turnover Cultural differences Language dialects

11. Gartner’s ten criteria for outsourcing destinations language, government support, labor pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, global and legal maturity, data and intellectual property security and privacy

12. Top 10 Technologies and Trends for 2010 Gartner, Inc. defines a strategic technology as one with the potential for significant impact on the enterprise in the next three years. Cloud computing Advanced analytics Client computing Green IT Reshaping the datacenter Social networking Security – activity monitoring Flash memory Virtualization for availability Mobile applications

13. Taras Kytsmey tkytsmey@softserveinc.com Tel: +380-32-240-9090 SoftServe, Inc. 52 V. Velykoho St. Lviv 79053, Ukraine www.softserveinc.com Copyright ©2010 SoftServe, Inc. Contacts