Companies looking for the most advanced outsourcing solutions are raising their expectations, preferring providers that offer business management functions such as procurement systems and purchasing software, a new European study has found.
The International Data Centre (IDC) reported that the financial services, manufacturing and governmental sectors concluded the largest proportion of western European outsourcing deals in 2005, accounting for about 90 per cent of the total aggregate value of $40.5 billion.
These deals were on a larger scale than in previous years, IDC reported. In 2005, nine megadeals were concluded, worth $20.5 billion.
Both BT Global Services and EBS cornered a larger market share than IBM because of weighty contracts, even though IBM gained the greatest number of outsourcing contracts, IDC said.
"The largest deals in 2005 got bigger… confirming the emergence of large-scale multisourcing, with five out of nine megadeals awarded by two government agencies," said Jennifer Thomson, research manager, IDC European Services.
Although the value of these deals increased, contracts are getting shorter, Ms Thomson explained, with customers less willing to be tied into contracts for long periods.
"Without the long contract lengths vendors must engineer cost savings in a much shorter time period, while at the same time developing collaborative go-to-market strategies to win in large-scale multisourcing," Ms Thomson commented.
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