services will come under increasing scrutiny over the coming year as buyers look to achieve the best results from contracts, warns Diamond Management and Technology Consultants.
In a forecast of trends, published ahead of its annual global outsourcing study, Diamond's sourcing practice claims that buyers who are disappointed with the performance of outsourcing companies are likely to bring back some of their work in-house.
Nonetheless, Diamond emphasised that the trend was "by no means the death knell for outsourcing", predicting continued growth for the industry within both the IT and business process sectors.
China in particular is expected to take advantage of its role as host of the 2008 Olympics to demonstrate its place as "an outsourcing super-power", with previous Diamond research indicating that the number of buyers who expect to outsource IT functions to the Asian nation grew by 48 per cent between 2004 and 2006.
Diamond also stressed that some buyers would want to establish closer relationships with outsourcing providers, with some already visiting their offshore training centres for extended period in order to improve working relations.
There is also expected to be a growing call for employees at outsourcing firms to undergo security checks.
"We are going to see companies scramble to find advisors who not only have the skills to review contractual agreements, but who also are willing to provide hands-on management of offshore resources at remote locations, and who can design and track meaningful measures of provider performance," said Tom Weakland, head of Diamond's Strategic Sourcing Advisory practice.
Meanwhile, new research has indicated that fears over increased regulation and compliance demands are making major companies reluctant to outsource their finance and accounting activities.
A survey of FTSE 350 executives by business consultancy LogicaCMG found that 68 per cent were put off outsourcing such functions due to current regulations.
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