Duration of Outsourcing Contracts

Filed in archive Outsourcing News on July 30, 2007

The 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.

Image source