The Future of Deal Structures: Shorter Deals and Outcome-based Pricing

By David Brown, Director, Financial Architecture, EquaTerra

First published at globalservicesmedia.com

They say that in the year 2010 astronauts from multiple countries will research the cosmos from the comfort of a newly completed International Space Station, while support staff back on earth will direct them using a new Microsoft operating system called Windows 7. But the global sophistication of the future doesn’t stop at spacecraft and software. Business the world over is getting savvier — and that also goes for outsourcing, as market trends today portend some notable shifts in IT and Business Process Outsourcing (BPO) deal structures for 2010.

Though some of today’s deals are becoming more global in reach, they’re also starting out smaller in scope, spanning fewer years and being priced based more on outcome than volume. Emerging deal trends such as these — along with ongoing demand as new deals are signed and old ones renewed — connote a marketplace that’s becoming better educated.

Let’s take a closer look.

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