What is Outsourcing?
Outsourcing sees uptick in contract renegotiations
by: Carlo Abadilla
Thursday, February 25, 2010 | Outsourcing Research / Trends | Comments (0)
A survey by Gartner Inc. indicates that out of 1,073 outsourcing organizations surveyed worldwide, almost 50% of them experienced a sharp increase in contract renegotiations. The survey further revealed that the majority of the renegotiations involved bids to cut costs due to the recession.
Gartner analyst, Allie Young, warned that these renegotiations only leave room for mistakes on both ends of an outsourcing deal.
Young says that the major complaints he hears from CIOs is the lack of innovation from outsourcing deals.
“My question is, What did you think you were going to get? There is no provision in the contract for innovation” Young commented in response.
Young further explained that successful outsourcing contracts depend on documentation. Citing Apple's $100 million investment in an outsourcing provider in hopes of acquiring innovative services, Young argued that the documentation of innovation is very difficult and rare in the industry.
"About the best we have been able to do is dedicate a pool of resources from the supplier side, whose job is to sit in the client's business and look for new opportunities to bring new projects to bear," stated Young.
Source:
http://searchcio.techtarget.com
Asian ITO spending trend to be reversed
by: Carlo Abadilla
Wednesday, February 17, 2010 | Outsourcing Research / Trends | Comments (0)
Experts predict that Asia's spending on information technology outsourcing will grow faster than their western counterparts this year, Financial Times reports. Dell Services chairman, Jim Champy sees this as a reversed trend in outsourcing spending from the recent trend of western groups buying services from Asian outsourcing locations such as India and China.
"We see, as most providers do, the Asian markets growing faster - clearly more than Europe, and certainly faster than the US," stated Champy. "What it would feel like to me is two to three times faster, percentage-wise."
A report by KPMG and Asian-Oceanian Computing Industry Organization projected a significant increase in Asia's share of global IT services spending – an estimated 26.3% compared to the current 20% in global IT and business process outsourcing services consumption.
The trend represents a complete reversal of the trend of Asian IT companies sending executives to developed markets to purchase business from western outsourcing consultancies.
Source:
http://www.ft.com