Loss of Value in Outsourcing Contracts

Filed in archive Outsourcing News on January 14, 2007

This may sound like a bad start for the outsourcing industry.

According to the latest Quarterly Index done by TPI, the outsourcing sector could face an increasing number of challenges in the year 2007. This was based on the poor performance shown in the last quarter of 2006 which revealed a 80% decrease in the level of outsourcing contracts.

Though that is the case, the study was also able to show a different trend in outsourcing. This trend pertains to the inclinations of company to favor shorter and smaller outsourcing contracts.

Personally, the lessening of value in outsourcing contracts is not a sign of weakness for the outsourcing industry. Instead, it just shows that companies are now learning how to use their outsourcing deals wisely hence the smaller and shorter approach.