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IT Leaders Prefer Long-term Deals

by: Sarah Joson

Monday, January 21, 2013 | Outsourcing News |

UK-based IT analyst firm Ovum recently revealed through its "2013 Trends to Watch: Bundled Outsourcing" report that IT buyers prefer longer-term, single supplier IT outsourcing deals. This can be attributed to the fact that multi-sourcing contracts didn’t live up to its premise and IT outsourcing clients are looking for more stability and control.

Longer-term, single-supplier IT outsourcing deals preferred by buyers

According to Jens Butler, principal analyst for IT services at Ovum, buyers nowadays are already experienced and know well enough when a plan will not work when it comes to outsourcing, as they are on their third and second generation of doing so. He added that most of the clients saw that multi-sourcing will ignite loss of control.

Moreover, he said clients are looking beyond cost savings, and want to improve customer satisfaction and value for the company.

Ovum also monitors packaged outsourcing activities periodically. They found that international contracts from manufacturing, financial services, and the government sector go beyond four years. Furthermore, the change from multi-sourcing to long-term contracts was widely observed in the insurance sector.


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