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Survey: Demand For Outsource Services Slows in First Quarter



A quarterly survey from a multinational outsourcing and insourcing advisory firm found that while the levels of information technology and business process outsourcing remains strong, the market is slowing.




A quarterly survey from a multinational outsourcing and insourcing advisory firm found that while the levels of information technology and business process outsourcing remains strong, the market is slowing.

“Outsourcing Pulse Surveys,” produced by EquaTerra, found that human resource outsourcing remained the leading market segment, cited by 29 percent of the company’s advisers as a task that organizations outsource. Information technology was cited by 23 percent and facility asset outsourcing by 19 percent. Service providers polled also cited HRO as the strongest process area.

“While levels of both ITO and BPO remain strong, there is an ongoing slowing in market growth rates,” says Stan Lepeak, EquaTerra’s managing director of research. “This is a function of a slowing in demand, a constraint in supply, and a more thorough sourcing process being employed by buyer organizations. Scope and contract value levels are also increasing at a slower rate.”

Other key findings from the survey of activity in the first quarter include: Outsourcing Pulse Surveys include:

  • Longer sales cycles for outsourced services in comparison to previous quarters
  • Improved sales capacity by service providers
  • Leading industries for overall demand were energy/utilities, CPG/retail and pharmaceutical/biotech

The surveys cover a variety of other topics including challenges to deal consummation, the impact of compliance, levels of offshore outsourcing and demand breakdown by process and subprocess, horizontal and vertical industry trends, and other critical measurements.




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  posted on 4/20/2006   Article Use Policy




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