FCW Insider

Blog archive

Has outsourcing become passe?

Just when you thought outsourcing was hot, hot, hot, a report released today says that the number of computer outsourcing deals fell for the third quarter.

The report by TPI Inc., which claims to be the "world's first and largest sourcing advisory firm," says that the outsourcing market could drop by 10 to 15 percent this year.

The report does not address government at all, as far as I can tell, but it is interesting.

Third-quarter results indicate an expected decrease of 10 to 15 percent in total dollar value for outsourcing contracts awarded in 2005, to US$60 to $65 billion from an average of US$72 billion awarded in recent years. To date, the year's total contract value (TCV) is US$43.8 billion for transactions signed in the Americas (US$21.3B), Europe (US$20.3B) and Asia (US$2.2B), compared to a global total of US$52 billion this time a year ago.

"The decline in outsourcing transaction value is due to several factors," stated Peter Allen, Partner and Managing Director, Global Practices, TPI, Inc. "With the exception of HRO, BPO has not grown as quickly as some had expected. Firms are increasingly taking advantage of offshore service delivery, reducing the TCV of contracts. TCV is also sluggish because of reduced capital intensity and shorter terms in ITO contracts."

Posted by Christopher Dorobek on Oct 18, 2005 at 12:15 PM


    sensor network (agsandrew/Shutterstock.com)

    Are agencies really ready for EIS?

    The telecom contract has the potential to reinvent IT infrastructure, but finding the bandwidth to take full advantage could prove difficult.

  • People
    Dave Powner, GAO

    Dave Powner audits the state of federal IT

    The GAO director of information technology issues is leaving government after 16 years. On his way out the door, Dave Powner details how far govtech has come in the past two decades and flags the most critical issues he sees facing federal IT leaders.

  • FCW Illustration.  Original Images: Shutterstock, Airbnb

    Should federal contracting be more like Airbnb?

    Steve Kelman believes a lighter touch and a bit more trust could transform today's compliance culture.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.