July 11, 2005
Outsourcing Contract Restructuring Hits An All Time High
A recent report indicates that a whopping 20% of the value of deals signed in the first six months have been restructuring of outsourcing contracts. This is almost double the 10 year average percentage of total value that has been dedicated to outsourcing, 11%. The rapid increase in the number of outsourcing contracts that are being restructured is due in part to the fact that companies interested in outsourcing now have more options. With more alternatives to choose from, companies interested in outsourcing have also become more precise as to their needs. Whereas a few years ago an outsourcing contract was drawn up for a major outsourcing conglomerate to meet all the peripheral needs of a company, often companies now sign many specific contracts with smaller companies. While this has meant more efficient services, it has also exposed companies to increasing difficulties in identifying companies with whom they can develop long lasting contracts. Bobsguide News reports:
"In general contract restructuring is prompted by considerations such as price, service, change of scope or additional capability. Lately, however, the emergence of a growing number of viable offshore locations, both nearshore and farshore, has added new impetus to organisations' desire to renegotiate"
Read More: OUTSOURCING CONTRACT RESTRUCTUREINGS HIT RECORD HIGH
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