New IT outsourcing model boosts bottom line

Spinoffs, buyouts, divestitures and focused acquisitions improve operating margins and bolster the bottom line for IT service providers -- and their customers.

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Faced with increased competition and pricing pressure, global service providers have been increasing their focus on their most lucrative business segments in recent years. And that restructuring is beginning to bolster their bottom lines. During the second quarter of 2014, IT outsourcing providers saw the highest growth in their operating margins in five years, according to outsourcing consultancy Everest Group.

The average operating margin for leading global service providers was 13.2 percent last quarter, up from 10.6 percent during the first quarter of this year. (Everest Group defines leading global service providers as Accenture, Aon Hewitt, Convergys, CSC, HP Enterprise Services, IBM Global Services, Unisys and Xerox Services.)

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