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Outsourcing on the Rise and Deal Sizes on the Fall

By ESOutlook

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Outsourcing, one of the most contentious issues in the developed countries is increasing in its number of deals but interestingly, the amount involved in the deals show a different picture. ISG (Information Services Group, technology insights and market intelligence company) reports that the number of outsourcing deals went up by 2 percent in 2013, but the value of those deals fell 18 percent to $18.7 billion compared to that in 2012.

The reason behind smaller deals in outsourcing is being attributed to the weak manufacturing sector and a general inclination of the customers towards smaller deal sizes. India, Australia and New Zealand saw a fall in the overall outsourcing market, but Japan showed positive signs, according to the press release by ISG.

Over the years, just like every other entity, outsourcing has remarkably evolved as well. Outsourcing has matured into what people call collaborative partnership or innovative partnering. The rules governing it are being manipulated to suit the ever-changing business needs but saving money remains the primary objective. Companies have experienced that they could get even more than what they have bargained for. It’s not just about saving money; they could also have access to better resources such as skilled human force and better infrastructure. Strategic benefits could also be a possibility in outsourcing.

Customers of outsourcing have used their experience to lighten up their business prospects. Their focus on multi-sourcing today, is designed to get the best service available out there. For example, little-known country like Philippines is going great guns in its outsourcing business. The business covers diverse domains such as IT and HR services, logistics, Research and Development (R&D), core product and services, and the rules and agreements are tailored according to their needs. Risk sharing, profit sharing and information sharing remain the crux of the matter.

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