Last Year's Outsourcing Trends are Accelerating

[OhioChick]

February 20, 2007 - New York - Look for accelerated growth this year of the outsourcing trends that predominated in 2006: Expansion of business process outsourcing (BPO), the maturing of the offshore market and more multi-sourcing at the expense of single, one-off “mega-deals.”

That’s the word from a survey of lawyers at the lawyers in Morrison Foerster’s Global Sourcing Group. Their view is based not only on their own experience on sourcing projects but also on the opinion of clients, service providers and outsourcing consultants, the company says.

Each of the trends cited will continue this year but at an accelerated pace, Morrison Foerster says. Not only has the mega-deal suffered, for example, but most deals are now shorter in duration and smaller in value than two years ago. Businesses remain committed to outsourcing but are less prepared than in the recent past to lock into long-term deals. Flexibility has become the outsourcing mantra.

Predictions for the outsourcing market in 2007 include:

-- A continued trend towards smaller, shorter deals as businesses focus on individual processes instead of large, complex institutional transactions;
-- Increased reliance on global service delivery models;
-- More importance for data privacy and data security issues;
-- Increased offshoring to China;
-- A revival of anti-outsourcing sentiment with 2006 U.S. mid-term elections;
-- Adoption of recognizable elements of IT outsourcing and BPO into traditional Japanese contract partnering operation.
http://www.insurancenetworking.com/protected/article.cfm?articleId=4557

[SharonAnn]

1. Every year they accelerate. Soon there will be nothing left to outsource.