A news release from EquaTerra said 88% of its outsourcing advisers described first quarter 2007 activity as a flat or up and 97% of outsourcing service providers described new deal pipelines in similar terms.
According to the research, different types of deals – including those for more “knowledge-based” processes – and smaller dollar value deals are becoming more prevalent.
The bottom line, according to the announcement: the research “ clearly illustrates that the outsourcing market is experiencing an adjustment phase, spurred by a maturing marketplace and a more sophisticated buyer community.”
EquaTerra said the hallmarks of this reshaping include:
- that a greater number of organizations are evaluating their global footprint;
- organizations are increasingly utilizing a combination of shared services and outsourcing;
- when using outsourcing, it is typically on a smaller scale and often with multiple “best of breed” providers; and
- service providers are being forced to retool their sales and delivery models.
Supporting this smaller deal/market adjustment finding was that 86% of EquaTerra advisers cited decreased or similar deal scope, as did 63% of service providers. Importantly, service providers shared anecdotally with EquaTerra that while deal scope is decreasing or holding steady, their pipelines are robust for the second half of 2007.
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