Outsourcing outlook metrics

Reports from the IAOP Global Outsourcing Summit 2009 in Carlsbad, California #1: Some interesting data points from todays sessions: From a survey of IAOP members expectations: Regarding existing outsourcing contracts, 43% of outsourcing will remain unchanged but 44% will have either renegotiate prices or volumes. 5% of outsourcing arrangements will be suspended or cancelled. Regarding the number or amount of new outsourcing, 38% expect no change, 36% expect more and 27% expect less. Why? Most respondents said more savings (no change there) but an increased number said "more flexibility." What are outsourcers going to be focused on? Greater due diligence, more off-shoring and fewer, larger providers. In other words, risk management. A contact from a IT vendor management group in a major multi-national corporation told me that they have been instructed not to do new outsourcing contracts or renewals for longer than one year. As he said, "That takes away one of our few negotiating points for lower prices." However, we then decided that in the current climate, it probably wont make any different and lower prices will still be available from providers worried about less work. The Indian share of outsourcing is still the biggest but is declining. The diversity of countries doing outsourcing is increasing.

Written by Michael D. Harris at 01:17

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