Our most recent TPI Index quarterly report caught
the attention of some outsourcing heavyweights, including executives at certain
service providers who are not happy with our outlook for 2007. One even told me, "Your last report is really hurting the outsourcing industry".
What we reported was largely retrospective, and no
one has offered any facts to disprove our tally. To recap: We said that the
first quarter saw a dramatic decline in the number and value of larger commercial
outsourcing signings, compared sequentially and year-over-year. We offered the
view that 2007 was stacking up to be a relatively soft year for new contract
awards, continuing the trend begun in 2006.
Our forward projection is based on our own pipeline
of transactions underway, and what we know to be happening in the
marketplace. We don't claim exact precision,
but it's been proven over the past handful of years that we've got a pretty
good sense of the industry.
Nevertheless, more than a few service providers have
responded to me with word that their new business pipelines are stronger than
ever. They tell me that they are
counting a huge slate of opportunities and are struggling to put enough
salespeople out there to cover all those deals-in-waiting.
Why the gap?
From our vantage, many of the "opportunities" for
which the provider community is marshalling their sales forces are really
early-stage strategy situations - cases where clients are trying to figure out
whether there's a pony worth riding in the outsourcing ring.
What is clear is that the marketplace needs more education,
and clients don't appear ready to cut outsourcing deals as often as they did in
the recent past. I'd appreciate hearing your thoughts on the demand
scenario.
Do you have a question, comment or suggestion?
