Outsourcing Deals: Better the Second Time
Outsourcers apply lessons learned to drive superior deals.Everyones always looking for a better deal, arent they? Hey, better deals are closely related to the pursuit of happiness, which is, after all, one of our nations founding principles. So why is it that outsourcers and their customers are always so proud to announce really long dealsdeals of seven, eight, even 10 yearsthat are probably longer than most marriages last? The only reason I can think of is that it makes a more impressive press release. Otherwise, it makes little sense to be tied to one outsourcer for so long.
Indeed, it appears that once customers sign these deals, they want them to be shorter. A recent Meta Group study found that although 80 percent of organizations will outsource at least one function by next year and 70 percent of that group will renew their contracts, many will cut back the scope and duration of the deal when they renew. The main reason is that customers find they need to regain control of their IT strategy and architecture, according to Dane Anderson, a Meta Group analyst.