In the Australian corporate and government sector the budgets are somewhat more modest … but confidence in the IT services sector was still measured by the hundred-million-plus deals.
Research group Gartner says 2007 will be marked not so much by the outsourcing “megadeal” of $1 billion or more, but rather where multiple suppliers win smaller contracts in massive projects of “megascope”.
Gartner defines a megascope as an enterprise-wide scope of work that is or will be outsourced and the organization awards the work to several providers on a selective basis, matching scope and requirements to the best value or best-fit provider.
Cumulatively, the megascope award may top $1 billion in value, but each individual contract is typically smaller.
According to Gartner, organisations generally won’t award large IT outsourcing contracts to one provider in 2007, but will split the work up among several companies.
“We expect large organisations to source the largest parts of their megascope engagements to large providers that have a similar global presence,” said Gartner research vice-president Lorrie Scardino.
“However, these large organisations will consider and select smaller or regional providers for focused parts of their megascope deals to engage with focused specialists, or expand the scope of services that are globally delivered.”
In 2006, many organisations made several awards by breaking up the scope of work into selective segments.
Although not all of these selective awards were megascope candidates, the total contract value awarded by a single client to multiple providers is a significant indication of the specific organisation’s adoption or continuation of outsourcing as a pillar of business strategy, as well as the market’s continued growth.
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