If IT vendors think that their services businesses are going to save their cookies this year, they may have another thing coming. According to a report just released by the analysts at Gartner, prices on infrastructure outsourcing services are expected to drop this year and next by anywhere from 5 to 20 per cent on new deals. …
Maybe I'm just bitter
"bitter on the customer side (because they get the least amount of service from the vendor to stay in compliance with the contract)"
So Gartner know of outsourcing contracts where the supplier freely delivers service over and above the small print in the contract? Sorry, have to go, I'm being dive-bombed by a squadron of flying pigs.
Looks like sanity may finally be prevailing.
Unless the service is extremely specialised outsourcing will never be good value. Outsourcers provide minimum service they can get away with at the maximum price they can screw the customer for, they need to benefit their shareholders. A properly governed internal service provides best value for the available resources. Anyone who outsources needs to explain to their shareholders why the service is so specialised or why they do not have the capability of managing their IT departments.
Currency Cost of Outsourcing
This article is not considering the impact of currency valuations on the cost of outsourcing. The US Dollar has risen significantly against the Rupee and the Philippine Peso, dramatically cutting the cost of the services. European companies haven't been as lucky, but the drop in demand has helped prices remain stable. For instance, outsourcing companies located in the Philippines with primarily US clientele, such as http://hitratesolutions.com , are growing rapidly despite the sluggish economy.
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