"The outsourcing model has changed. You can only sell behind a contract. A lot of our client relationships start at the staff augmentation level," says Dan Pritchard, senior vice president of marketing of Entex Information Systems. "We work up the food chain, as the client trusts us more. The relationship comes first. You can only sell behind a contract."

Even the relevance of the term 'outsourcing' is being challenged by today's crop of outsourcers. Many believe that outsourcing in its classic soup-to-nuts iteration is dead, and outtasking, the smaller, functionally-based version of outsourcing is emerging.

"Customers are no longer willing to outsource it all to you so there is much more happening in outtasking," says Tony Macina, general manager, global service delivery, IBM Global Services. "You are even seeing small and midsized businesses outtasking. Even at that level no one does it all."

Outsourcing has a few years to evolve. It has had its boosters and its critics, but most think the concept was oversold, particularly in its early stages. But times have changed, outsourcers say.