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ARTICLE · 09 NOVEMBER 2015

Volume Up, Value Down: A Growing Trend In Sourcing

Mayer Brown
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The second quarter of 2015 saw a record high in the number of sourcing deals, globally. But, while volumes are increasing and the market appears to be growing...

United KingdomEmployment and HR
Peter Dickinson
Peter Dickinson
Megan Paul
Megan Paul
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The second quarter of 2015 saw a record high in the number of sourcing deals, globally. But, while volumes are increasing and the market appears to be growing, the annual contract value and duration of these transactions continues to decline.

Recently released data from ISG, a global technology insights, market intelligence and advisory services company, showed a record high of 451 outsourcing contracts signed in Q2, and a total of 754 agreements in the first half of 2015. However, the ISG Outsourcing Index, which provides a quarterly review of sourcing industry data, also showed that during Q1 of 2015 the annual contract value was down 14 percent from the previous year.

Why are we seeing this increase in deal activity but a decrease in contract value? Is it solely the move toward automation and greater digitization causing a decrease in price? Or are there other factors to consider? Does this trend have the capacity to fundamentally change the way customers

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