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INVESTMENT CONCLUSION:
We caught up with BPO industry analysts NelsonHall. First half 2012, BPO deal conversion rates have been hampered by macro factors and risk aversion following a strong 2011, potentially leading to pent up demand. There is an increasing focus on domain expertise, which translates into a Race Up the Value Chain. The pricing environment remains disciplined. If slower conversion rates persist (there have been encouraging signs in recent months), it could impact 2013 as vendors are working through a healthy 2011 backlog in 2012. The Race Up the Value Chain favors those with consulting (front end) capabilities such as Accenture, IBM, and to some extent Cognizant. Our BUY rated names are IBM, Accenture, Cognizant, Syntel, Virtusa, Genpact, WNS, and EXLService.
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Joseph D. Foresi
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About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, BPO, IT Outsourcing, and Cybersecurity Managed Services. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides valuable insights and guidance to buyers and managed services executives. Contact him at [email protected].