Misc

IT outsourcing trends 2009: Latest deals for the recession and beyond

As enterprises round the bend on the second half of 2009, possibly steering toward brighter economic times, the timing is right to capitalize on IT outsourcing trends for the year thus far.

This SearchCIO.com Quick Guide brings you the latest thinking on this important topic, from how offshore and onshore outsourcing has changed in the recession to advice on structuring your IT outsourcing contract to take advantage of current market trends.

How are CIOs changing the way IT outsourcing contracts are developed?

IT outsourcing prices may be on the decline, but companies looking to renegotiate their IT outsourcing contracts should be prepared to lengthen the terms of their deals and sign on for additional vendor services.

Moreover, the economic downturn has provided some great opportunities for outsourcing and offshoring vendors to trade some savings for some flexibility on how and when the work gets done, and service providers are willing to work on a more performance-based model in order to mitigate risk for clients.

How can I get the most from IT outsourcing providers during a recession?

Build and manage a deal that aligns with your IT and business environment. Are you looking for a utility provider or a shared-risk partnership? Consider which deal archetype best suits your business requirements, then structure a healthy outsourcing contract -- with forward-looking provisions for service.

How should I set up governance for IT outsourcing contracts?

Governance models are increasingly placing responsibility for IT outsourcing contracts in the sphere of the IT department rather than procurement, experts agree, as companies look to improve results and put the right person or team at the helm of the outsourcer relationship.

Positioning IT outsourcing contracts in procurement's sphere might lead to lower-cost arrangements, but they're more likely to be lower quality as well.

In light of the Satyam scandal, how do I protect my organization from IT outsourcing risk?

Customers of any IT outsourcer that runs into trouble should consider renegotiating their IT outsourcing contracts, and make sure they have the documentation and staffing needed to take their business elsewhere.

Even if a crisis is limited to one provider, CIOs with any outsourcing contracts have work to do, experts said, to make sure their projects or levels of service are uninterrupted.

If I'm no longer deriving value from IT outsourcing, how can I bring it back in-house?

"The pros of insourcing are the speed and control of business change," said Ben Trowbridge, CEO of Alsbridge Inc., a Dallas-based IT outsourcing and business process optimization consulting firm. Trowbridge said his company's IT insourcing evaluations have increased about 15% this year. "There's a sense of intimacy with the business users that's hard to achieve with outsourcing. And it can mean saving jobs."

  • Learn more about how to bring jobs and cost savings back in-house with IT insourcing.
  • Listen to our podcast on the pros and cons of IT insourcing.

Outsourcing blog roll

This was first published in July 2009

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