Outsourcing, Advisory, Reports, Equaterra, TPI

[SharedXpertise Commentary] Are outsourcing advisory reports contradictory?

08 Aug 2006 | (Thinking Point) | SharedXpertise Editor Commentary

TPI and Equaterra, two of the top competing outsourcing advisory firms, have released their research for the second quarter of 2006 within days of each other. The EquaTerra Pulse Survey and the TPI Index Report give on the surface seemingly contradictory information. For example, the TPI Index reported a record number of BPO deals, while EquaTerra reported that the demand trends for BPO, while up for the quarter, were down from the prior year.

In fact, according to Equaterra's Managing Director of Research, Stan Lepeak, the results aren’t really contradictory; rather, it’s the focuses and methodology the organizations utilize when analyzing and reporting on the market that ultimately present somewhat differing results.

TPI’s Index tracks the total volume (number and total contract value/TCV) of deals in the market above the U.S. $50 million TCV mark that have closed. EquaTerra’s Pulse Surveys track changes in “demand trends,” not absolute volume levels, for deals both being considered and already in the pipeline. So, while the TPI Index reported a record number of BPO deals, EquaTerra reported that the demand trends for BPO, while up for the quarter, were down from the prior year. “Demand” in this quarter may not turn into closed deals for several quarters. So, the EquaTerra Pulse Surveys provide a forward indicator while the TPI Index tracks, for the most part, deals that have closed (and to a lesser degree what’s in the TPI pipeline.)

Keep in mind that the two organizations' results often coincide. Both organizations see a decline in HRO demand for example. EquaTerra and TPI were also in general agreement that deals on average (both those signed and those in the pipeline) – are getting smaller.

Author: Commentary, SharedXpertise Editor
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