The Global ISG Outsourcing Index for the 3rd quarter of 2015 speaks clearly: even though the volume of contracts above 4 million EUR increased of the 7% if compared to the same quarter of the previous year, the total value was close to 2014 Q3, settling itself at 2.1 billion EUR.
This testifies an emerging trend: the rise of smaller deals as a way to better face the needs of a fast changing market.
As perfectly underlined by Outsourcemag.com this is even more evident when considering data regarding ITO Services market. In this case the drop in the annual contract value has been of the 28% in the last 9 months, reaching a 4.5 million EUR average, the lowest value since 2009.
While it’s true that usually third quarters are the weakest along the year and rebounds are expected for the closing ones, some conclusions can be taken.
It seems in fact that companies offering niche services and able to adapt to quickly changing business environments will be the successful ones thanks to this mind shift.
Companies tend to drop mega-contracts (bigger than 80 million EUR) linking them to services’ suppliers for several years, rather preferring smaller providers that can fulfill their business needs on a short term basis and with a lower impact on their economic balance, while on the other hand providing a more effective solution.
“We strongly believe that in such a contest, a company like NATEK represents the kind of business model that companies in need of ITO services are looking for: a dynamic firm rich in expertise, able to operate within small time frames while keeping a high level of quality and attention to its customers’ business needs” said Peter Augustinic - Country Sales Manager for CZ&SK at NATEK.