If you decided to forgo a massive IT outsourcing deal this time around, it appears that you are part of a trend. Although nearly as many outsourcing contracts were signed in the first half of this year as in the same period last year, the value of the contracts fell approximately 20 percent, according to a study by consulting firm TPI.

The move toward smaller outsourcing agreements was most apparent in the Americas, where the total value of contracts was about half of what it was a year ago, reports Stephanie Overby at CIO magazine. The reasons for this trend are varied. For one thing, the market is more or less saturated.

"The market in the U.S.--particularly around the IT area--is mature," said John Keppel, president of information services at TPI. "Penetration rates into the largest of the Global 2000 organizations in each industry group is pretty high, so it is less likely that we will see large, new scope IT transactions coming to market."

Enterprises are also favoring multiple outsourcing providers these days because they have access to a greater variety of skills, and they can land more competitive pricing. This avenue comes with its own set of challenges, however, including more complicated contract management and oversight duties.

Keppel said he expects to see growth in the business process outsourcing market, where contract values tend to be lower than in IT outsourcing.

For more:
- see Stephanie Overby's article at CIO

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