Yes this is exactly what has happened to the Outsourcing and BPO industry during the first quarter of 2016. The ISG Outsourcing Index indicates a rise of 20 % in the total contract value (or ACV = All Commodity Value) for the first quarter of 2016. The outsourcing index only captures those contracts which have an annual value of greater than 5 Mio US-$...so it naturally focuses on the bigger BPO industry players.
Never the less...it is unqualified good news for the big and the small players. Even more impressive, the value of smaller outsourcing contracts (below the 5 Mio threshold) surged an even more astonishing 40 % during Q1.
It has been my opinion for a long time that outsourcing (IT and Business Process Outsourcing) is becoming more and more the go to solution for smaller companies to maintain and improve their competitive position. If the 40 % rise in total contract value is any indication that process is clearly ongoing.
The law of large numbers for an established industry is that growth rates of the type we have witnessed in Q1 cannot be maintained indefinitely. Therefore some level of moderation for the remainder of the year can be expected.
As is always the case...there is of course a potential downside to the report. Clients looking to outsource or renew existing outsourcing contracts might find that the next price negotiation might be fought a bit more hard then expected.
Given the above numbers it seems clear that quite a few of the major outsourcing providers, regardless if they are located in India, China, Philippines or Eastern Europe, are a lot more busy than they used to be this time around last year.
Consequently there will be less room to maneuver on pricing.