Executive Briefings

U.S. Customers Spread IT, BPM Outsourcing Contracts Around

The market for outsourcing services is shifting as U.S.-based customers divide their outsourcing work among more providers, build in simple ways to break contracts and hire more U.S.-based software-as-a-service providers in addition to offshore outsourcing services.
A Gartner report estimates that the value of IT and business-process outsourcing contracts dropped by half during 2007.
However, according to Kurt Potter, the Gartner analyst who was lead researcher on the study, the total spent on outsourcing isn't dropping; end-user companies are just spreading the work out among a larger number of providers, rather than relying on a small number of big-dollar contracts with IBM, EDS and other traditional providers.
Potter, who says the tactic is relatively new, calls it multisourcing and warns that it introduces more complexity into outsourcing contracts--both during negotiations and afterward, as companies try to manage more contracts and IT services vendors.
Source: Baseline, http://www.baselinemag.com

The market for outsourcing services is shifting as U.S.-based customers divide their outsourcing work among more providers, build in simple ways to break contracts and hire more U.S.-based software-as-a-service providers in addition to offshore outsourcing services.
A Gartner report estimates that the value of IT and business-process outsourcing contracts dropped by half during 2007.
However, according to Kurt Potter, the Gartner analyst who was lead researcher on the study, the total spent on outsourcing isn't dropping; end-user companies are just spreading the work out among a larger number of providers, rather than relying on a small number of big-dollar contracts with IBM, EDS and other traditional providers.
Potter, who says the tactic is relatively new, calls it multisourcing and warns that it introduces more complexity into outsourcing contracts--both during negotiations and afterward, as companies try to manage more contracts and IT services vendors.
Source: Baseline, http://www.baselinemag.com