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Duration of Outsourcing Contracts

Filed in archive Outsourcing News by Carol Kendrick on July 30, 2007

Data_center_outsourcing_Figure_2.jpgThe next thing that companies should consider when thinking of data outsourcing would be the duration of these contracts. A longer period of time does not easily guarantee success that is why companies should first deliberate if they want a long-term or short term one.

In the same research study, it shows that many companies opt for a longer period of outsourcing as opposed to having it for a short period of time. Here is a summary of the respondent's outsourcing period:

Longer than 5 years: 17%
1 year: 16%
5 years: 14%
3 years: 12%
2 years: 10%
4 years: 2%

*Other details could be found in the image.

I think the reason why companies opt for 5 years is that they would be able to save more in their outsourcing contracts. In the case of companies who opted for only a year, I guess that they are still in the testing period of whether or not outsourcing would work for them.

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