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Highest Number of Outsourcing Deals to Expire next Year

by: Sarah Joson

Friday, December 6, 2013 | Outsourcing News |

ISG-One.com recently shared data collected by the Information Services Group (ISG) indicating that 2014 may be the year with the most number of contracts that are set to expire or will be up for renegotiation.  

Next year, 1,316 active commercial contracts - total contract value of US$114 billion - are expected to expire. This is four percent higher than 2013, and is up 19 percent from last year.  

EMEA region accounts for 47 percent of the TCV, 39 percent came from the Americas, while 13 percent came from the Asia-Pacific region.

The information technology makes up three-quarters of the expiring contract TCV, and almost two-thirds in terms of contract volume.

ISG also shared the reasons contributing to the heightened volume of expiring contracts:

- Short- term contracts are gaining traction in the industry.
- Increased interest of clients on renegotiating rates halfway through the agreed timeframe of the contract.
- Clients are considering the transfer of operations from their current provider to a niche provider.

In general, buyers who are happy with their current provider have a high possibility of renewing their contracts. But, they are also found looking at options as their governance and service integration processes evolve - especially if their providers are not able to deliver what is expected of them.


Source:
http://www.isg-one.com

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