Not today. In the new sourcing paradigm, service providers are either unwilling or unable to raise cash in order to fund a discount.

The economic situation -- and its consequences for outsourcing -- is undoubtedly serious. Yet if service providers and clients grasp these changes early, current conditions could trigger improvements in sourcing relationships that will benefit both parties.

Firstly, the new fiscal conditions mean that both parties have an increased incentive to achieve value evenly over the lifetime of the contract. Cost savings will no longer be achieved through the mirage of financial engineering. Instead, both parties will be challenged to deliver savings through long term improvement initiatives, economies of scale, adherence to standards and optimised service delivery and relationship management.

, the new outsourcing paradigm is putting pressure on client organisations to contribute to improving performance in order to achieve savings alongside their service provider.

Early signs are that the best performing clients are willing to let their service providers implement change in order to achieve either economies of scale or standardised delivery. Inefficient processes, often inherited as part of the deal, are a significant burden to delivery operations. They can increase cost by up to 25 per cent above the market rate and often deliver no benefit.