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Blog & News

New contract models in IT Outsourcing to cure lack of innovation

10.02.2016, Author: Leszek Czarnota, Categories: Business

The IT Outsourcing for application services is changing together with the IT market. Interestingly changes were inspired by other industries – maturing of Internet of Things or more general - digital business technologies and fresh approach brought by cloud providers. Effective innovation, agility and flexibility are now top challenges seen by many CIO as more crucial than cost savings.

No surprise that approximately 32% of CIOs plan to change ITO provider and over 70% of CIOs plan to incorporate changes in their outsourcing agreements according to Gartner CIO Survey.

Traditional, old contract  models are based on input or transactional approach. Supplier margin is tied to delivery of number of predefined resources (FTE) or activities. Such old contract models have poor performance of ...

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