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The NOA's latest research showed an 8% growth in outsourcing spending over the last year. The IT outsourcing market grew 12% and business process outsourcing grew6%.
The extension of existing contracts hadthe greatest impact on outsourcing service providers' turnover, according to 40% of respondents. Ninety per cent of respondentssaid customers taking outsourced work back inhouse had a low impact.
The most common contracts types also changed over the last year. Outsourcing contracts have decreased in length according to 18%. But 90% of respondents say the value of contracts have remained the same or increased.
Martyn Hart, Chairmen of the NOA, said outsourcing has always been seen as a way for a business to cut costs, and shouldnot be surprising the industry continuesto grow.
"However, with the increased pressure on companies to cut costs, many are pushing through higher volume low-cost contracts, over shorter time frames, which more often than not sets the outsourcing contract up to fail" he said.