Although businesses have long used IT service providers (opens in new tab) for business continuity and digital transformation, dependance on these partners has grown significantly since the start of the pandemic.
This is according to a new report from Boston Consulting Group, based on a global poll of 200 large enterprises in varying sectors, which states that almost four in five (79 percent) asked their IT service providers for help in the past year. These firms sought help with longer payment terms, price reductions and free support for more processes or additional services.
This cry for help was “widespread”, the report added, with businesses struggling to cope with extended periods of turbulence. Most enterprises had to tackle falling revenues, operational challenges and service provider-related challenges. In spite of these problems, businesses still consider working with service providers important, especially on digital transformation projects.
“IT service providers have played a key role in supporting businesses throughout the pandemic, from delivering additional capacity and capability, taken on lenient payment terms, sometimes proactively creating and offering new solutions to plug the gaps that were revealed in many organizations’ operations,” said Sukand Ramachandran, Managing Director and Senior Partner in BCG’s Digital practice.
With enterprises increasingly dependent on service providers (opens in new tab), most will be looking to renegotiate outsourcing contracts in the future, the report added. New focus will be placed on changes to contractual terms and conditions, pricing structure, delivery models and the scope of providers’ services.
Almost all businesses expect to grow even more dependent on IT service providers over the next two years.
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