As companies attempt to implement more multisourcing agreements, the number of megadeals awarded to a single service provider has declined, according to Gartner, Inc. Megadeals are characterized as being worth more than $1 billion. In 2005, 11 outsourcing megadeals were awarded, a decline from 12 in 2004 and 16 in 2003.
"This is part of a trend we see in IT outsourcing (ITO) in which comprehensive, end-to-end contracts signed with a single vendor are declining. Even some existing megadeals are being re-competed and broken up among multiple providers that bring best-of-breed skills," said Kurt Potter, research director for Gartner's IT services and outsourcing research group. "Business process outsourcing (BPO) megadeals will continue to be the exception rather than the rule as most BPO activity will continue around smaller more-focused deals, primarily in the back-office and horizontal functions with human resources, finance and accounting."
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