Has the slump for outsourcing started? For the first time since 2002, the global outsourcing market size has shrunk in the third quarter of the 2006. In this quarter, contracts fell by both value and volume. This could be attributed to the fall in the duration of contracts.
The trend seems to be changing. Large, multi process contracts are being replaced with small, single process contracts. This trend is being witnessed in both ITO and BPO contracts. Very few multi process contracts have been signed in the year 2006 as compared to the previous years.
If this trend continues the days are not far away when a slump would be witnessed in the outsourcing industry. Before this really happens the industry should try and find out why this is happening in order to avoid a precarious situation ahead.
