Last Thursday two news articles caught my attention. Both were in the context of Outsourcing. One referred to the outsourcing deal between IBM and Bharti Airtel – India’s largest private telecom operator. While the other referred to KPMG’s survey on outsourcing.
In March of 2004, Bharti Airtel inked 10 year IT outsourcing contract with IBM. The deal value was then pegged at US $700 million. Interestingly the deal value is linked with Airtel’s revenues. With Airtel’s revenues doubling in the last financial year, it is now reported that the value of the deal may have soared to about US $1.6 billion.
On the other hand, KPMG’s recent study shows that A significant number of businesses globally are unable to accurately quantify the benefits their outsourcing units bring in for them. The report also says that despite outsourcing being an accepted norm, companies continue to face constant problems from their outsourcing arrangement.
It was very ironical to come across these two reports particularly on a day when we are working on our plans for the next financial year and taking some strategic decisions.