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On the case HCL-Bekaert Transitioning service providers and fine-tuning the global services approach

On the case HCL-Bekaert Transitioning service providers and fine-tuning the global services approach

Satisfaction with traditional, often first-generation outsourcing contracts remains muted. Many of these deals were signed primarily with cost-cutting in mind, and the contractual arrangements often did not offer the flexibility required for the sourcing organization to adapt the contract to its needs. Both the supply- and buy-side have significantly matured their approach to sourcing, making buyers more confident about switching providers. However, mitigating the risks of such a transition remains critical for the overall success of the outsourcing agreement.

In this context, Bekaert, a global market and technology leader in steel wire transformation and coatings, with headquarters in Belgium, chose HCL Technologies to run its data center operations. HCL for its part focused on building the relationship and delivering value beyond what is defined in the contract.

The contract between Bekaert and HCL is a good example of the evolution of sourcing strategies and the maturation of client sourcing organizations. It shows how the emphasis has shifted away from traditional full-scope infrastructure outsourcing in which suppliers take over customer assets and manage them offshore, to a more modern form of outsourcing that offers flexibility in both its contractual terms and the way project teams are put together.

The Bekaert project is a good example of a market dynamic that Ovum has observed repeatedly in recent times. Namely, that the India-based service providers are increasingly being awarded second-generation outsourcing contracts.

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