Outsourcing Age

Outsourcing: Is the megadeal really dead?

Author: OutsourcingAge Staff

Fashions in outsourcing change constantly – and the megadeals which were a hallmark of its early development have been replaced for many organisations by a more nuanced approach. But that doesn’t mean the giant deals are gone forever.

Certainly as the recession began to bite, outsourcing megadeals – those of $1bn or more – started to decline. Research published in late 2008 – when the credit crunch first began to make itself truly felt – found there was one quarter where just a single megadeal was signed, while the value of outsourcing contracts across the board fell by two-thirds quarter-on-quarter.

And there’s no doubt that some of that reluctance to sign megadeals was spurred by the economy, as traditionally outsourcing-friendly sectors such as financial services and manufacturing saw profits tumble and therefore IT spending did likewise.

“Typically you’re looking at 12 to 15 [megadeals] a year around the world. We did see that drop down quite dramatically for a year or so, and a lot of that was driven by the cloud of uncertainty that descended across the globe,” Duncan Aitchison, EMEA president of outsourcing consultancy TPI, told silicon.com.

The Rest Of The Story Here »

Tags: Aitchison, Credit Crunch, Emea, Financial Services, Hallmark, Megadeals, No Doubt, Nuanced Approach, Organisations, Outsourcing Consultancy, Outsourcing Contracts, Profits, Recession, Reluctance, Rest Of The Story, Sectors, Silicon, Tpi, Two Thirds, Uncertainty

This entry was posted on Sunday, February 21st, 2010 at 3:28 pm and is filed under Outsourcing News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.