The mega deals market (>$100M TCV) is shrinking. In general, enterprises are reconsidering large scale transformation investments, breaking down larger programs and staggering them over budget cycles based on priority or predictable RoI. Exceptions may be seen in the Telecom, Transportation, Utilities, Mining, and Energy verticals spurred by the infrastructure spending bill. Small to mid-sized deals market ($5M – $15M ACV) will continue to see momentum driven by bite-sized initiatives, cost and operations focused mandates, and mid-cap enterprises coming out of the woodwork to sustain their business in a tightening liquidity market. Nearly 60% of new deal value is expected […]
One still sees so many enterprises locked in long term contracts, punitive termination penalties, proprietary technologies, and inflexible financials. Such relationships are the ones where there is seldom any innovation. The provider sees no additional gains to be made from a client stuck in one’s chair whereas the client sees no reason to invest more resources in a lopsided arrangement – and the relationship plummets. But in an industry so interconnected and stakeholders so transient, the word gets out. Such troubled accounts become competitive targets and the provider starts losing ground. That’s the thing – a contract can have lock […]
This may be a bit of memory jog as this is not about the automation BOT that has been the top of mind recall in recent times but rather the good old, Build-Operate-Transfer (BOT) that is making a quiet but definitive comeback to the boardroom discussions. During the pandemic and post ‘The Great Resignation’, firms have and are continuing to de-risk their alternate service delivery models. As part of this, enterprises are increasingly assessing and executing BOT transactions. The drivers for them to do this are multifold e.g., deleveraging third-party outsourced portfolio, managing sensitivities around product development, building digital talent […]
Staying in a marriage has its benefits in the current climate, but at what cost? Yes, the global growth sentiment is bearish—painful inflation, stocks nosediving, supply chain bottlenecks, war, and whatnot. Why take-on additional risks of switching vendors, reopening contracts, and teasing transformation in this climate, correct? Correct! But have you set boundaries for your comfort zone? Because, if you have not then chances are that you are blurring the lines between that of a practical bear and that of a victim. Nearly 70% of the IT-BPS transactions that our advisors managed recently were sole-sourced or incumbency vendor renewals / […]
Buyer-Provider IT contracts have historically lagged the Analyst-Market Spiel and the same is true today. Transformation agendas are hard to push forward if existing contracts are still struggling with elementary issues. Maturity of outsourcing contracts on the ground has lagged the analyst talk. We have observed that service providers are incorporating elements of analyst spiel and transformative agenda as part of their pitches while their existing contract are struggling with the basic transactional issues. It is imperative that service providers need to bridge gaps in capabilities around the base or fundamental services as they look to build next gen capabilities […]
Providers can get fixated with what they consider as value differentiators instead of understanding what the client’s value definitions are. Over the contract lifecycle, the value gap only tends to increase. With the anti-incumbency trend at its peak, Providers can benefit with a neutral and holistic assessment of existing client relationships to proactively cement and expand the account A misalignment in the value definition between Service Provider and the enterprise leads to significant gap between the value delivered by provider and value realized by client. This gap only gets amplified over the contract life cycle. In our experience, the value […]
Whether or not a benchmark meets your objective is contingent on how you approach a benchmarking initiative. Benchmarking is an integral part of any contract evaluation for reassurance of the value on offer. However, for the benchmarking exercise to deliver real and meaningful value, it is important to have a holistic benchmarking approach in partnership with experienced advisor with access to relevant data with context details as well as practical deal experience.
Financial Engineering Mechanisms are now more important than ever. With the increasing need for contractual and financial flexibility, financial engineering has become more important than ever in outsourcing contracts structuring. In our experience, winning bids reflect flexibility to align with buyer motivation. Typical buyer considerations could include: Avoid upfront surge in expense Consistent spend or cost savings over the deal term Risk sharing by service provider till end of deal term
Related Case Studies
The mega deals market (>$100M TCV) is shrinking. In general, enterprises are reconsidering large scale transformation investments, breaking down larger programs and staggering them over budget cycles based on priority or predictable RoI. Exceptions may be seen in the Telecom, Transportation, Utilities, Mining, and Energy verticals spurred by the infrastructure spending bill. Small to mid-sized deals market ($5M – $15M ACV) will continue to see momentum driven by bite-sized initiatives, cost and operations focused mandates, and mid-cap enterprises coming out of the woodwork to sustain their business in a tightening liquidity market. Nearly 60% of new deal value is expected […]
One still sees so many enterprises locked in long term contracts, punitive termination penalties, proprietary technologies, and inflexible financials. Such relationships are the ones where there is seldom any innovation. The provider sees no additional gains to be made from a client stuck in one’s chair whereas the client sees no reason to invest more resources in a lopsided arrangement – and the relationship plummets. But in an industry so interconnected and stakeholders so transient, the word gets out. Such troubled accounts become competitive targets and the provider starts losing ground. That’s the thing – a contract can have lock […]
This may be a bit of memory jog as this is not about the automation BOT that has been the top of mind recall in recent times but rather the good old, Build-Operate-Transfer (BOT) that is making a quiet but definitive comeback to the boardroom discussions. During the pandemic and post ‘The Great Resignation’, firms have and are continuing to de-risk their alternate service delivery models. As part of this, enterprises are increasingly assessing and executing BOT transactions. The drivers for them to do this are multifold e.g., deleveraging third-party outsourced portfolio, managing sensitivities around product development, building digital talent […]
Staying in a marriage has its benefits in the current climate, but at what cost? Yes, the global growth sentiment is bearish—painful inflation, stocks nosediving, supply chain bottlenecks, war, and whatnot. Why take-on additional risks of switching vendors, reopening contracts, and teasing transformation in this climate, correct? Correct! But have you set boundaries for your comfort zone? Because, if you have not then chances are that you are blurring the lines between that of a practical bear and that of a victim. Nearly 70% of the IT-BPS transactions that our advisors managed recently were sole-sourced or incumbency vendor renewals / […]
Buyer-Provider IT contracts have historically lagged the Analyst-Market Spiel and the same is true today. Transformation agendas are hard to push forward if existing contracts are still struggling with elementary issues. Maturity of outsourcing contracts on the ground has lagged the analyst talk. We have observed that service providers are incorporating elements of analyst spiel and transformative agenda as part of their pitches while their existing contract are struggling with the basic transactional issues. It is imperative that service providers need to bridge gaps in capabilities around the base or fundamental services as they look to build next gen capabilities […]
Providers can get fixated with what they consider as value differentiators instead of understanding what the client’s value definitions are. Over the contract lifecycle, the value gap only tends to increase. With the anti-incumbency trend at its peak, Providers can benefit with a neutral and holistic assessment of existing client relationships to proactively cement and expand the account A misalignment in the value definition between Service Provider and the enterprise leads to significant gap between the value delivered by provider and value realized by client. This gap only gets amplified over the contract life cycle. In our experience, the value […]
Whether or not a benchmark meets your objective is contingent on how you approach a benchmarking initiative. Benchmarking is an integral part of any contract evaluation for reassurance of the value on offer. However, for the benchmarking exercise to deliver real and meaningful value, it is important to have a holistic benchmarking approach in partnership with experienced advisor with access to relevant data with context details as well as practical deal experience.
Financial Engineering Mechanisms are now more important than ever. With the increasing need for contractual and financial flexibility, financial engineering has become more important than ever in outsourcing contracts structuring. In our experience, winning bids reflect flexibility to align with buyer motivation. Typical buyer considerations could include: Avoid upfront surge in expense Consistent spend or cost savings over the deal term Risk sharing by service provider till end of deal term
Related Case Studies