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15 Aug 2008
Today’s economic climate is causing a shift in power from the supplier to the customer in the outsourcing world, according to market watcher Pierre Audoin Consultants (PAC).
With some outsourcing relationships being several generations old, end user customers now have the experience to develop more robust platforms from which to bargain and they are able to more easily escape or transition away from incumbent suppliers the analyst claimed.
However despite the shift in power, the majority of firms are choosing to remain with their incumbent supplier for the time being.
Further reading
PAC’s Deal Tracker, which records all publicly disclosed IT services contracts awards, shows that of those UK companies that updated their outsourcing deals during 2008, just 13 per cent switched to a new supplier.
But PAC warned that the accelerated M&A activity in the second half of 2008 will also impact outsourcing providers, as incumbents are left wondering whether a new owner will bring in its preferred supplier, or take contracts in house.
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