TPI, neoIT Expand Partnership

Work more closely on offshore sourcing alternatives

Houston and San Ramon, CA  February 11, 2003  TPI, a sourcing advisory firm, and neoIT, an offshore outsourcing advisory firm announced this week that they have expanded their partnership, initially established in 2000. Under the new agreement, neoIT and TPI are working more closely, including doing joint sales calls, joint service delivery teams and neoIT co-locating key personnel at TPI headquarters.

According to TPI chairman, president and CEO Dennis McGuire and neoIT CEO Atul Vashistha, the partnership would help both companies in many ways. They said it would enable TPI to expand its advisory service offerings and provide neoIT with a greater base of clients evaluating and executing offshore outsourcing strategies. Also, it will give outsourcing buyers the specialized knowledge required to successfully outsource in low-cost markets such as India, the Philippines, Russia, China and other global outsourcing destinations.

"Offshore sourcing transactions are complex and require a deep understanding of local markets, cultures and business practices. By building on our relationship with neoIT we can enhance our offshore advisory services while providing our clients with an interface to the suite of TPI's advisory services," said TPI's McGuire.

The companies explained that offshore markets such as India, Philippines, China and Russia are already providing high-quality options for U.S. and European companies seeking to reduce IT and business process service delivery expenses, and the volume of offshore outsourcing activity is expected to expand exponentially. The Indian government projects that during the next five years, IT and BPO outsourcing to India will grow to over $80 billion. Other markets such as China, Philippines and Russia will also leverage their low cost and highly educated talent pool to add more regional alternatives.

According to industry analyst projections:
" A Merrill Lynch study in 2001 noted that 70 percent of Fortune 500 CIOs outsourced less than 5 percent of spend to Indian firms; however, this is expected to increase to more than 15 percent by 2003-2004;
" Forrester forecasts that the offshore IT outsourcing market will grow from 12 percent of a Fortune 1000 IT services budget in 2001 to more than 28 percent in 2003;
" IDC estimates offshore outsourcing will enjoy a compound annual growth rate of 38 percent and increase its proportion from a quarter to more than one-third of the total IT services marketplace; and
" IDC reports that offshore BPO is likely to reach $1.2 trillion by 2006 ($712 billion in 2001.

Since the inception of the partnership, TPI has leveraged neoIT's offshore expertise to provide advisory services for over $400 million of total contract value in offshore transactions.