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The TPI Index

An Informed View of the State of the Global Commercial Outsourcing Market Third Quarter of 2008

October 15, 2008

Copyright 2008, Technology Partners International, Inc. All Rights Reserved. No part of this document may be reproduced in any form or by any electronic or Copyright means, 2008, Technology Partners International, Inc. All Rights Reserved mechanical including information storage and retrieval devices or systems, without prior written permission from Technology Partners International, Inc.

Welcome
TPI presenters
Partner & Managing Director Peter Allen

Partner & President, TPI North America Scott Gildner

Partner & President, TPI EMEA Duncan Aitchison Partner & Managing Director, Financial Services Operations, TPI North America Brian Smith
Copyright 2008, Technology Partners International, Inc. All Rights Reserved

An Informed View
Insights into the Broader Market

24th Quarterly TPI Index

Covers metrics for 3Q08 Insights on commercial outsourcing contracts valued at >$25M Present a detailed profile of the outsourcing activity in the third quarter, including an in-depth look at activity in the distressed Financial Services industry Expectations for the remainder of 2008 and into 2009

Goal

Host

Cowen and Company

TPI Index Format For More Information

Summary of the market indicators Analysts invited to ask questions during the Q&A session

Slides are available at www.tpi.net Continue the discussion at www.considerthesourceblog.com

Copyright 2008, Technology Partners International, Inc. All Rights Reserved

Headlines
Year-over-year changes in the global outsourcing industry for the third quarter of 2008

Year-to-Date Metrics Are Up The number of contracts awarded is up almost 5% TCV of those contracts has grown nearly 19% ACV has climbed 27%

3Q08 Soft in Broader Market Absence of large deals EMEA declined in TCV levels Lowest ITO performance by TCV since 1Q96

Softness in the global Financial Services started late last year and has continued through 3Q08

Copyright 2008, Technology Partners International, Inc. All Rights Reserved

Industrywide Contract Award Trends

Weak third quarter results follow three successive quarters of exceptional strength
Industrywide Contracts With TCV > $25M
Q/Q Comparison ($B)
Industrywide TCV ($B) Total Industrywide Contracts (#)

Q/Q ACV Comparison ($B)

Industrywide ACV ($B)

TCV ($B)

# of contracts

40 30 20 29.7 10 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 21.3 18.2 23.2 15.5 27.9 14.4

200 160 120 80

4 5.8 2 4.8 3.7 3.4 3.2 5.5 2.8

40 0

0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08

Third quarters are typically the weakest quarters in any given year

Fourth quarters are typically the strongest quarters in a year

Copyright 2008, Technology Partners International, Inc. All Rights Reserved

Industrywide Mega-Deal and Mega-Relationship Award Trends

Low performance drove the soft TCV and ACV results for the third quarter
Industrywide Contracts With TCV > $1B
Q/Q Comparison ($B)
Industrywide TCV ($B) Total Industrywide Contracts (#) Industrywide ACV ($B)

Industrywide Contracts With ACV > $100M

Q/Q Comparison ($B)
Total Industrywide Contracts (#)

TCV ($B)

# of contracts

ACV ($B)

# of contracts

15 12 9 6 3 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 5.8 2.4 1.0 3Q08 10.6 4.1

12 10 8 6 9.3 9.7 4 2 0

5 4 3 2 1 1.28 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 1.19 0.77 3.63 2.66 2.64 0.50 3Q08

20 16 12 8 4 0

In the past, when mega-relationship and mega-deal activity were slow during a quarter, an uptick in large deal activity followed in the next quarter
Copyright 2008, Technology Partners International, Inc. All Rights Reserved

We foresee mega-deal and mega-relationship activity increasing in 4Q08

Contract Award Trends by Region

Weaker contract awards in the third quarter across all regions except Asia Pacific
Industrywide Contracts With TCV > $25M
Q/Q Comparison by TCV ($B) of Contracts Awarded
3Q07 4Q07 1Q08 18.5 12.4 4.7 6.7 7.5 5.6 8.7 5.4 2.1 4.0 1.4 1.9 3.3 13.3 15.1 2Q08 3Q08

Americas

EMEA

Asia Pacific

YTD Through September Comparison by TCV ($B) of Contracts Awarded

2006 YTD 2007 YTD 39.0 17.2 19.7 22.5 28.9 7.3 9.0 6.7 2008 YTD

Americas outperformed EMEA in TCV on a quarterly basis for the first time in nearly two years

31.9

Americas
Copyright 2008, Technology Partners International, Inc. All Rights Reserved

EMEA

Asia Pacific

Industrywide ITO Contract Award Trends

Third quarter ITO awards signaled the lowest quarter for ITO TCV in more than ten years
Industrywide ITO Contracts With TCV > $25M: Q/Q Comparison ($B)
Industrywide TCV ($B) Total Industrywide Contracts (#)

TCV ($B)

# of contracts

30 25 20 15 10 5 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 18.1 12.1 10.6 19.8 16.8 20.3 9.1

200 160 120 80 40 0

The previous three quarters were positively impacted by several large networking deals the industry did not see that trend continue in 3Q08

Q/Q Comparison by TCV ($B) of ITO Contracts Awarded with TCV > $25M
3Q07 4Q07 1Q08 14.6 3.9 2Q08 3Q08

9.8 2.6 3.8 4.3 6.5 3.3

11.7 6.9

1.5

3.1

1.2

1.4

1.9

Americas

EMEA

Asia Pacific

Copyright 2008, Technology Partners International, Inc. All Rights Reserved

Industrywide BPO Contract Award Trends

While weakening in the third quarter, the YTD record shows increases in BPO contract awards by number, TCV and ACV
Industrywide BPO Contracts With TCV > $25M: Q/Q Comparison ($B)
Industrywide TCV ($B) Total Industrywide Contracts (#)

Facilities Management
Contracts account for > 23% BPO TCV (2008 YTD: $4.6B; 2007 FY: $1.2B)

TCV ($B)

# of contracts

15 12 9 6 3 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 3.2 6.1 4.9 9.9 6.4 7.6

100 80 60 40 5.3 20 0

Finance and Accounting

TCV has risen in 2008 YTD, exceeding 2007 full-year TCV figures (2008 YTD: $2.5B; 2007 FY: $2.4B)

Human Resources
Declined significantly YTD by both number of contracts and TCV (2008 YTD: $0.9B; 2007 FY: $3.6B)

Q/Q Comparison by TCV ($B) of BPO Contracts Awarded with TCV > $25M
3Q07 4Q07 6.3 2.7 2.9 3.2 3.3 2.3 2.2 3.9 1.5 0.6 0.9 1.5 0.2 0.5 1Q08 2Q08 3Q08

2.1

Americas

EMEA

Asia Pacific

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Industry Segment Comparison

Financial Services sector has seen a sustained downturn in its awards of new outsourcing contracts
Industrywide Contracts With TCV > $25M
Number of Contracts Awarded
2007 YTD through Sept. 2008 YTD through Sept.

132 101 80 44 20 23 33 20
Financial Services

104 77 50 13
Manufacturing

33 15

21

17
Telecom

28

25

Business Services

Energy

HC & Pharma

Media & Entertainment

Retail

Travel & Transport

TCV ($B) of Contracts Awarded

2007 YTD through Sept. 2008 YTD through Sept.

17.9 8.6 3.1 2.2

Business Services

18.7 15.6 11.0 3.2 4.4 9.4 1.8 2.0

Manufacturing Media & Entertainment

10.1 3.7 1.0

Retail Telecom

4.3

1.5 1.9
Travel & Transport

Energy

Financial Services

HC & Pharma

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Financial Services Contract Award Trends

The uncertainty and unrest of todays global economic climate is beginning to affect the Financial Services sector
Industrywide Financial Contracts With TCV > $25M
Q/Q Comparison ($B)
Industrywide TCV ($B) Total Industrywide Contracts (#)

Q/Q ACV Comparison ($B)

Industrywide ACV ($B)

TCV ($B)

# of contracts

2.0

10 8 6 4 2 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 7.6 7.0 3.4 7.4 5.2 2.6 3.2

80 70 60 50 40 30 20 10 0

1.5

1.0 1.26 0.5 0.58 0.0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 0.46 1.25 1.45 1.00 0.57

2009 is likely to begin with the same pattern set over the past five quarters
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Key Financial Services Contract Award Metrics Financial Services as a sector is down in most regions most notably in banking
YTD Y/Y Growth or Decline

YTD 2008

Value

Average TCV Average ACV Americas TCV EMEA TCV Asia Pacific TCV Banking TCV Insurance TCV

$108M $20M $2.8B $6.5B $1.7B $4.7B $5.1B

28% 26% 42% 36% 1% 54% 25%

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Financial Services Industry

Economic factors impact FS sourcing activity

Expectations for the remainder of 2008 into 2009 When we entered 2008
Impact of credit crunch Long term potential in FS still

looks good
Wildcard: Captive divestitures likely to continue probably

expected to turn recessionary in U.S.

Despite this, indications

accelerate
Uncertainty in FS institutions

reflected FS outsourcing activity increasing

delaying decision making in outsourcing

The pattern of variability is

expected to repeat itself in 2009

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Service Providers Signing Five or More Contracts > $25M

Distribution of awards among providers has changed in the last five years
Industrywide Contracts With TCV > $25M: 2004 vs 2008 Comparison Service Provider Diversity

Market Five Years Ago... (Service providers with 5 or more awards)

2004 YTD Through Sept

2008 YTD Through Sept

98

105

Current Market... (Service providers with 5 or more awards)

40 25 14 28

# of SP signing one or more contracts

# of SP signing three or more contracts

# of SP signing five or more contracts

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2008 YTD Service Providers with Most TCV Awarded

The top 15 service providers by TCV awarded in each region indicate that service provider diversity is alive and well in 2008
Americas Accenture ACS Alcatel-Lucent AT&T BT Convergys CSC Genpact HP-EDS IBM Infosys Perot Systems RR Donnelly Symcor TCS EMEA Atos Origin AT&T BT Capita Carillion CSC EDB Business Partner Ericsson HP-EDS IBM Johnson Controls Nokia Siemens T-Systems TCS Tech Mahindra Asia/Pacific Accenture Alcatel-Lucent Ericsson HP-EDS IBM Infosys Motorola Nokia Siemens Optus Satyam TCS Unisys VADS Wipro WNS

Please note that service providers are placed in alphabetical order and no rankings are implied these placements are based on 2008 TCV awards sourced from the TPI contracts database.
Copyright 2008, Technology Partners International, Inc. All Rights Reserved

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Key Trends in the 2008 Global Outsourcing Market

Despite softness in 3Q08, growth is anticipated in the Broader Market
Slowdown affected the momentum gained but not enough to dash 2008s jump start over 2007 TCV for 2008 is expected to exceed 2007s mark of nearly $85B Fewer large contracts and slower activity in EMEA dampened the quarterly results Mega-deal and mega-relationship activity increasing going forward, beginning in 4Q08 Recessionary influences from previous quarters impacted the FS sector Impact on overall industry outsourcing is yet to be determined Overall industry revenues for 2008 expected to be near 10% at > $88B ITO expected to be up about 9% at $66B; BPO up around 14% at $22B

3Q08

Larger Contracts

Industry

Outlook for 4Q08

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