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Recession changes outsourcing model

Andy Gallagher | Feb. 11, 2009
In the new sourcing paradigm, service providers are either unwilling or unable to raise cash in order to fund a discount.

In a client organisation last year, for example, Compass found that eight per cent of the cost of a large outsourcing contract was caused by a combination of outdated processes and unwillingness to enforce appropriate behaviour. Following this analysis, collaborative change initiatives between vendor and client have achieved previously untapped savings, which went straight to the bottom line of that business.

In the new outsourcing paradigm, savings are going to be achieved through a CIO's frugality at home rather than through the generosity of vendors with their sorely crunched credit.

Andy Gallagher is a consulting director responsible for IT service providers at Compass Management Consulting. A white paper on this subject can be found at


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