"Throughout the history of outsourcing, we've seen during the tough times that a lot of these decisions are extremely tactical, short-term oriented and present consequences downstream," says Ben Pring, research vice president at Gartner. "An uncertain is not a slam dunk for outsourcers, but some very bad deals can be put in place. It's the ugly truth of outsourcing."

Outsourcing in a tight economy can represent a classic case of "You get what you pay for" to enterprise IT executives, analysts say. For instance, companies looking to squeeze costs out of a contract with a service provider can suffer degraded service levels without too much concern from the outsourcer, Pring explains. Passing responsibility for infrastructure, applications or staffing to a third-party -- regardless of the economy -- leaves the customer vulnerable to the whims of the provider and can make outsourcing a risky proposition in tough financial times.

In the short term the deal may help a company's bottom line, but long term, enterprise companies need high-quality services to better compete.

"Oftentimes, you are going to be disappointed with the level of cost reduction you can achieve in an outsourcing deal, and if that is all you are focused on, inevitably, it will produce a bad deal," Pring says. "Historically customers get lousy quality of service when trying to squeeze an outsourcer. . . . Really the service provider has no incentive to invest in better services or staff for a smaller contract."

The trend toward shorter-term and smaller deals will continue in 2009, according to global sourcing advisory firm TPI, and despite the rush to reduce expenses, contract negotiation cycles have lengthened -- which could benefit both customer and provider.