LONDON, October 29 /PRNewswire/ --

- Organisations Grapple With Challenges of Managing Multi-Provider/ 
Multiple Outsourcing Efforts

Despite the fact organisations worldwide are deferring capital
expenditures, outsourcing continues to be the number one tool chosen to drive
organisational change, according to EquaTerra's Advisor and BPO/ITO Service
Provider Pulse Survey 3Q08.* The findings show demand for outsourcing is
outpacing business investments in areas such as hardware, software or other
types of more discretionary project-based services.

Growth in outsourcing was positive, but mixed across market sectors with
over 40 per cent of those polled citing increased demand levels in the
quarter. The survey also revealed that focus is shifting from longer-term
initiatives aimed at improving end-to-end business processes and moving
toward efforts that deliver quick return on investment (RoI) and/or
facilitate short-term business objectives that bring immediate cost savings,
help align operating costs to reduced revenue/profits levels and reduce
short-term capital outlays.

Key findings from EquaTerra's 3Q08 Pulse:

- Demand for outsourcing - Demand for BPO and ITO rose in 3Q08 according
EquaTerra advisors, and was mixed according to service providers. Demand was
stronger in Europe than in the North America (64 per cent of EU advisors
cited increased demand compared to 25 per cent in the Americas) and slightly
stronger for BPO (58 per cent) over ITO (39 per cent). Service providers
polled were somewhat more pessimistic on demand levels, but, overall, are
still seeing market growth.

- Forty-one per cent of service providers characterised their 4Q
pipelines as up; a drop of 11 per cent from last quarter and below the survey
average of 55 per cent,

- Economy both disrupting/driving deal flow - Thirty eight per cent
overall (service providers 43 per cent, advisors 33 per cent) cited economic
conditions as causing buyers to slow or defer outsourcing efforts, the
highest level cited over the past three quarters. However, 42 per cent of
overall survey respondents indicate economic conditions are driving more
outsourcing, despite slowness in certain market sectors.

- Increased pricing competitiveness- Half of the service providers polled
reported more aggressive pricing, up 15 per cent, but contract profitability
remains stable - 61 per cent of service providers report no change, while 26
per cent report a year-over-year improvement. Increased pricing
competitiveness is a manifestation of tight market demand, increased
competition for deals and more demanding buyers.

Emerging issues/concerns:

Spurred on by globalisation, technology and financial forces, outsourcing
has gained ground as a strategic change initiative. With greater acceptance
and implementation, buyers are beginning to grapple with how to manage and
govern multi-provider/multiple outsourcing efforts. While many outsourcing
contracts are still initiated at the functional or business unit level, both
EquaTerra advisors and global service providers indicate buyers are beginning
to establish multi-provider sourcing relationships at the corporate level in
an effort to manage business case objectives better and measure RoI.

In recognition of potential overlap/integration issues, more buyers are
taking the increased cost and complexity of employing multiple providers in
overlapping functional areas into consideration when short-listing potential
service providers. Longer term, this trend could lead to more supplier
rationalisation and consolidation to streamline and simplify sourcing and
governance efforts. Bottom line, buyers should account for
multi-provider/multiple outsourcing complexities upfront during the sourcing
process for new outsourcing efforts.

"Over time, buyers will likely adopt a global, cross-functional or
portfolio-based governance approach," says Stan Lepeak, EquaTerra's managing
director of global research. "Developing and adopting standardised
outsourcing governance operational models, investing more in skilled
personnel and leveraging software tools to automate and improve governance
operations will be central to achieving business case objectives for
multi-provider outsourcing efforts."

* About EquaTerra's 3Q08 Pulse

EquaTerra conducts ongoing research on a variety of topics relating to
emerging markets, changing market conditions and demand for outsourcing. The
company combines relevant recent research with trending data gathered through
its quarterly survey of leading outsourcing service providers and its own
client-facing advisors to create its Pulse report. For more detail or to
obtain a copy of the Pulse survey, please contact stan.lepeak@equaterra.com

About EquaTerra

EquaTerra sourcing advisors help clients achieve sustainable value in
their IT and business processes. Our advisors average more than 20 years of
industry experience and have supported over 2000 transformation and
outsourcing projects across more than 60 countries. Supporting clients
throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we
have deep functional knowledge in finance and accounting, HR, IT, procurement
and other critical business processes. EquaTerra helps clients achieve
significant cost savings and process improvement with internal
transformation, shared services and outsourcing solutions. For more
information, please contact Melissa Gardiner at +44(0)845-838-7500 ;
melissa.gardiner@equaterra.com; http://www.equaterra.com.