Outsourcing, Deals, Gartner
Outsourcing to grow, but deals to shrink - Gartner
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According to a new research by Gartner, big outsourcing deals are on their way out.
Gartner predicted a shift away from full-service, 10-year, multibillion-dollar outsourcing deals for technology service providers. In the future, the trend will be toward smaller outsourcing agreements with specific business goals.Gartner also predicted that the number of businesses starting new outsourcing deals would grow by 30 percent this year. Gartner suggested that large outsourcing providers will need to focus on ‘ marketing their core service offerings and differentiating their business value’. The research firm said that large outsourcers should propose more ‘risk-based pricing’, such as performance contracts in which the total payment is dependent on business results rather than measurements of how the technology performs.
The notion that outsourcing megadeals are waning runs counter to a recent report from market analysis firm Datamonitor. According to Datamonitor, the number of deals with a value greater than USD 100 million increased by 49 percent to 244 last year, and deals worth more than USD 1 billion more than doubled to 29.
Advocates of outsourcing argue that it allows companies to focus more on their core business rather than having to take care of things such as software, human resources or accounting. Another lure of farming out tasks is that it can trim a company's costs.
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