Some Companies Still Like to Supersize Outsourcing Deals

Ann All

There appears to be a clear trend toward companies forging multiple, smaller agreements with outsourcing providers rather than opting for mega-deals with a single supplier.


Benefits of doing so include improved alignment of IT with business strategy, reduced risk and more supplier accountability.


Just 19 percent of respondents to a PMP Research survey conducted late last year used a single outsourcing supplier. Advisory firm Morgan Chambers found that UK companies intended to spend up to 25 percent of their outsourcing budgets on small offshore deals in 2007.


Still, despite this emerging preference, some companies are bucking the trend with large wholesale outsourcing deals.


Two notable examples from the UK: Supermarket chain Somerfield recently signed a seven-year, $63.6 million deal with Tata Consulting Services, and retailer DSG International inked an agreement with systems integrator HCL that includes system development, application delivery and infrastructure support and maintenance.

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