Smaller Deals & Shorter Term Global Sourcing Contracts In 2009

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Industry experts are anticipating that the trend toward shorter-term contracts and smaller global sourcing deals will continue in 2009. In 2008, large IT contracts became less popular, as more companies gravitated to smaller deals with more than one IT vendors, which known as multi-sourcing. Multi-sourcing allows you to lower the risks associated with mega global sourcing contracts. With a shorter-term contract you also have the flexibility to evaluate the performance of the relationship, without getting bound to a lengthy contract.

There are some significant advantages to smaller deals. For example, it is hard to find an IT vendor that can successfully provide a numerous services. When smaller deals are made with multiple vendors, you have access to a broader range of expertise and resources. Plus, it is not as difficult to terminate an outsourcing arrangement when it is a smaller deal, since you are not as dependent on the provider.

Shorter-term contracts eliminate some of the anxiety linked to IT outsourcing. Most IT relationships last anywhere from five to fifteen years. If you have a shorter-term contract, you can feel more comfortable with the knowledge that if the agreement is not what was expected or if you choose to stop outsourcing, you are not bound to a long-term contract.

The current economy has also caused many organizations to take their time in signing outsourcing contracts, which has led to longer negotiation cycles. Although you may be searching for avenues to quickly cut costs, which can be accomplished through IT outsourcing, you still need to be sure to measure the risks and benefits.

If you are considering IT outsourcing as an option to reduce costs and increase productivity, you need to think about the goals for the upcoming year or more. A quick decision should not be made just to reduce expenses. IT outsourcing has many benefits, but it is not a good fit for every organization. Once the decision has been made to outsource, it is difficult to come back from it if you change your mind.

A global sourcing strategist can help you weigh the benefits and risks of IT outsourcing. Global sourcing strategists offer support throughout the entire process, including objective evaluations and decision making, and can help you avoid hidden costs associated with outsourcing. Even though global sourcing strategists do not offer legal advice, they can advise you on matters that will help you get the outsourcing contract right.

About the Author:
A&E Consulting is a full service consulting firm that has been successfully helping clients with their global needs. Visit http://www.globalsourceyourit.com or call 661-200-3612 for more information.



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