Outsourcing; Study: more using specialized contracts.

• Author: Marshall, Jeffrey
• Position: BusinessBRIEFS

The outsourcing industry is undergoing major changes, as buyers demand more value, more flexibility and more manageability from business process outsourcing (BPO) and IT outsourcing (ITO) engagements. That's according to new findings by Everest Research Institute, based on research that the organization conducted jointly with Bernstein Research.

In an analysis of new outsourcing contract signings and related market trends, Everest found that as the market for outsourcing services continues to grow and mature, buyers are shifting away from large, broad-based, IT-oriented single-vendor contracts in favor of more specialized contracts. These are focused on discrete business functions such as human resources, finance and accounting and procurement that are designed to deliver more tangible results and benefits.

"Much has been made of the fact that outsourcing contracts are being parceled out to multiple vendors and that average contract size is getting smaller as a result, misleading some into questioning the current state of the outsourcing market," said Peter Bendor-Samuel, CEO of Everest. "The industry has never been stronger, with significantly more choices...