Outsourcing--the business trend that saved IT companies' money and meant a loss of jobs for U.S. workers--is going through some serious changes. Research firm Gartner says the outsourcing industry is in turmoil and predicts that 25 percent of today's top business-process outsourcers will disappear in the next three years.

Hard to believe, but Gartner said that economic pressures, poorly conceived contracts and the inability to adapt to standardized delivery models are all having a big impact. "Some will be acquired and some will exit the market completely to be replaced by dynamic new partners delivering BPO as automated, utility services," said Gartner research VP Robert Brown in a press release.

Gartner said some warning signs that an outsourcing partner is in trouble include: The outsourcer is losing money, not winning new business and suffering the loss of marquee clients. Other signs that something may be amiss include poor capitalization that is impeding growth and high exposure to tainted financial firms.

The bottom line, said Gartner, is to have an exit strategy, and to look carefully before you sign any new outsourcing contracts.

For more out outsourcing trends:
- see this InformationWeek.com article

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