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Outsourcing Continues to Evolve

by: Sarah Joson

Wednesday, October 16, 2013 | Outsourcing News |

The IT outsourcing market appears to be shifting as buyers are adopting sophisticated ways in transferring IT processes.

According to Ovum, the global outsourcing market revenue will only grow four percent next year due to a tougher contract negotiating and restructuring environment. One thing that providers should look out for is the $146bn-worth of contracts that are expected to expire by the end of 2014.

Thomas Reuner, principal analyst at Ovum, told TechRepublic that a lot of people predicted that the outsourcing hype will eventually end. It is still regarded as one of the most strategic tools for businesses and that it will take a long time before its streak ends. One thing will surely change and that is the innovation and emergence of new IT outsourcing factors.

Ovum expected that contracts that are set to end this 2014 in the US will reach $92.3bn. In Europe, outsourcing activity will be subdued because of reforms in procurement processes in the UK.

A key factor seen by Ovum is the cloud as it has great influence on the way services are delivered and the profits of a company.

Reuner noted that the cloud is also a solution that can address cost reduction challenges. It is making IT tools and processes more accessible to businesses.


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