One way you have reports from Gartner and Abderdeen which says outsourcing come what may will save costs or otherwise the concept would have disappeared. But on the other hand you have reports like this, where Compass Management Consulting warns that two thirds of outsourcing contracts valued more than $40 million were “unraveling.”
The finding is not based on thin air as, as many as 240 deals worth more than £20 million were analyzed and it was found that,
outsourcing providers were pricing contracts to produce savings of up 18 percent compared with in-house costs in the first year.
The shocking finding of the report says that in the final years of the contract outsourcing providers escalate costs by 30% and in some cases even 40%.
Are service providers taking ride on the outsourcers on the final days? The report does not deal in that, but if that is so, practices like these must be highlighted and reported so that all are aware of such malpractices.
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