Technology Partners International Inc. (ATPI), a TX-based consulting firm, estimated that close to $100 billion worth of large outsourcing contracts are due for renewal by 2008.
According to ATPI, US companies are about to spread mega-deals from large single contracts over multiple, smaller providers, a blow to all large outsourcing firms.
While the IT outsourcing / BPO market will continue to grow at an average 8% in 2008, according to the Gartner Group, the year might mark the end of the current “one-size-fits-all†outsourcing model.
Far too often, leading providers have applied the brute force approach to outsourcing: “throwing people at a problem”, especially by tapping into their cheaper pool of talents (India, China, etc.). This model has reached its limits and has finally started to fade away.
New customer/relationship models are emerging, centered on flexibility. Says Julie Giera from Forrester Research, “customers want an outsourcing offering for IT and Business Process Outsourcing that evolves, or “flexesâ€, as their needs change over time.â€
Market leaders might be slow to embrace this new model; an opportunity of a lifetime for smaller size providers to make it to the next step.
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