Outsourcing: Going Down

Filed in archive Outsourcing Issues on November 8, 2006

Just when you thought that the only direction known to outsourcing is up, a research study shows otherwise.

The said research study revealed that the rate of outsourcing contracts and also its value are down this third quarter of 2006. The value of the outsourcing deals done during this period dropped 15% showing only a rate of 4.5 billion dollars.

The "Big Six Providers" also revealed their dropping shares in the BPO industry from 40% to 35%. Companies which are included as the "Big Six Providers" are: (in no particular order)
IBM
HP
CSC
Accenture
EDS
Capgemini

This trend shows that companies sign fewer outsourcing-related contracts as compared before. Even if the rates have dropped in terms of outsourcing contracts being signed, it does not mean that outsourcing as a whole is going down. I believe that companies are just a little bit "cautious" when doing their outsourcing deals.