Fixing Costs as Outsourcing Feels Pinch

The early days of discounted services from IT providers, it would appear, are over, with many service providers unable to afford competitive rates.

Compass Management Consulting’s latest research into outsourcing contracts establishes this point clearly, and Compass consultant Andy Gallagher told ComputerWeekly.com: "Fewer outsourcing providers are entering into contracts that have negative cash-flow in year one in order to fund a short-term discount for their clients."

The demise of the discount, however, need not be as gloomy as it appears. Fixed costs will improve cashflow for businesses on a more stable long-term basis than occasional discounts.

Modular managed services aim to help companies achieve core business goals through technical expertise and expanded business.

Vedante Srihari, Head of Calsoft Enterprise Solutions and Managing Director of Inatech Solutions, said:

“Knowing you can access a reliable team on flexible terms will be a lifeline for many.”

Mr Srihari went on to explain how modular programmes help businesses cut costs, by having the option to buy contracts for the services they need, rather than long-term contracts that often outlive their purpose and drain resources.

In the current economic climate, having the flexibility to cut IT service costs in the event of unexpected financial changes can be a valuable asset to any company. Credit crunch aside, flexible and modular services could save businesses more money in the long run than short-term initial discounts.