Restructurings, in which clients renewed, renegotiated or expanded existing contracts, accounted for almost half of the total contract value (TCV) for IT outsourcing in 2010's first quarter, according to TPI's just-released Index of the Outsourcing Industry. Three mega-deal restructurings alone accounted for almost one-third of TCV. New ITO contract value was essentially flat compared to the same period last year at about $9 billion. With more contracts coming up for renewal, TPI analysts expect restructuring will continue to play an important role for the remainder of this year.
The tough economy has affected the outsourcing industry, along with every other industry out there.
When Ann All wrote about outsourcing trends, citing information from IT services company CSC, she found the trends largely involved buyers deriving more value for their money. Instead of the traditional tactic of trying to negotiate the lowest possible prices, however, buyers are relying on more sophisticated techniques such as outcome-based pricing.
Ann spoke to several other sources, including Unisys, TPI, Everest Group and Compass Management Consulting, to get their takes on top outsourcing trends for the next year. They offered additional insights on the increased value theme, including buyers asking their suppliers for help in targeting internal inefficiencies and developing ideas for improvement.