July 01, 2006
Western European IT outsourcing bounds ahead through mega deals
A few months back, you might recall a survey that indicated a decline in the number of large outsourcing deals. More recently, we also read a report about the apparent slowing down of the outsourcing process.
However, a new study by IDC reveals that the top-100 pack of Western European outsourcing deals accounted for a total value of $40.5 billion in the last year alone. This quantum jump has been powered by large deals that got even bigger. However, another interesting facet to these mega deals is that they are for a shorter contractual term.
What makes such deals a win-win situation? Jennifer Thomson, research manager, IDC European Services, explains:
Without the long contract lengths, vendors must engineer cost savings in a much shorter time period, while at the same time developing collaborative go-to-market strategies to win in large-scale multi-sourcing.
Clearly, the preference is for shorter term periods and for avoiding a prolonged engagement between outsourcing partners. According to the IDC study, the trend toward short engagements involving big bucks is also accompanied by a stronger BPO sector in Western Europe.
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