What are the major trends you are seeing in the large global outsourcing deals you are advising on? Contract duration is coming down. The first- and second-generation deals were seven to 10 years. They are now closer to five to seven years. This results in smaller total contract value.
Another trend is the proliferation of offshoring in outsourcing contracts. Up to 50% of the transactions TPI is involved in have an offshore component. Clients are more predisposed to look at and engage with service providers who have an offshore service delivery capability. This, in turn, is also reducing total contract value.
We are also advising on more multivendor deals, as well as selective sourcing deals, rather than single-vendor deals. Clients are seeing value in best-of-breed solutions. As a consequence, it is putting more pressure on vendor management and governance.
