Are Shorter Deals, More Contracts the New Normal?

John Keppel of ISG provided a simple answer to why we saw more smaller deals last year. "Flexibility is key, and shorter deals provide this flexibility.”

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Much has been made about ISG’s numbers citing an 8% drop in overall contract values last year in the world of IT/BPO outsourcing — despite the record number of deals signed. CIO magazine wrote on the topic recently, asking “How Long Can IT Outsourcing Deliver More for Less?” with its headline. John Keppel of ISG provided a simple answer to why we saw more small deals last year. “Flexibility is key, and shorter deals provide this flexibility.” He notes churn and the smaller players entering the market that aren’t able to scale up and handle huge contracts like the old guard. This view is one that doesn’t view less money in the marketplace but simply a transition period in how the work gets done as more companies — both customers and vendors — enter the space.

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