“Risk and Reward Sharing Model” Rescue to Falling Contracts Between Vendors and Clients

This vertical fall in the industry has hit every single company globally from clients to vendors. However companies with variable cost model has not taken a bigger hit in comparison to companies with the fixed cost structure. Even the companies which were outsourcing are now under cost pressure and cash flow pressure as their net outflow are fixed while the net inflow is variable. The existing ties between vendor and client are weakening due to the cost pressure and cash flow issue. Clients, which were satisfied with their existing vendors for a longer period are now struggling to withhold the same relation despite quality being delivered. Vendors, on the other side, are struggling to align their cost or cash flow model as they were build in the upmarket.