About 65% Outsourcing Contracts Ended Before Actual Termination – Compass

According to a study conducted by Compass Management Consulting, a UK-based business and IT consulting company, about 65 percent of outsourcing contracts terminated before the actual date of termination over the past two years. The move was primarily driven by increasing costs charged by vendors as well as distrust among the outsourcing buyers and vendors.

These findings came after the company examined a total of 240 outsourcing contracts worth GBP 3.3 billion awarded over the last 2 years. Among the key findings, outsourcing deals costs about 20 percent more as compared to the cost involved in maintaining a comparable in-house department providing the same functions/services. However, vendors claimed to reduce the cost of maintaining an in-house department by up to 18 percent.