Over the past 12 months, consulting rates across Western Europe
have stabilised once again after years of constant decline. There
is also evidence that service providers are currently trying to
push up rates again in order to protect or enhance their profit
margins. We expect these attempts to fail, because service
providers face huge resistance from end users, who have become far
more sophisticated in their underlying sourcing strategies while
market conditions have favored them over the past several
years.
Most buyer firms continue to expect to negotiate lower rates by
applying more stringent vendor management and contracting processes
— allowing them to better leverage corporate buying power. Also,
with offshore and near shore resources becoming more available even
across the traditionally more conservative Continental European
markets like France and Germany, strong downward price pressure is
clearly set to continue for the foreseeable future.
