Outsourcing Toolkit

IT cynicism fuels outsourcing failure

Andy McCue silicon.com

Published: 17 Oct 2005 17:10 BST

A failure to involve the IT department in outsourcing decisions is fuelling cynicism about the real motives for outsourcing — and leading to a dangerous disconnect between the board and IT managers, according to new research.

The study of 103 IT managers from mainly UK private sector organisations found only a quarter of outsourcing contracts are based on a joint decision between IT and business managers.

The research points to a disconnect where business mangers make the decision to outsource and then pass on responsibility for the service level agreements (SLAs) to the IT department, with almost 40 percent of business managers rarely involved in negotiating the SLAs.

Dr Jim White, business technologist at business service software provider Managed Objects, which sponsored the study, said there is a perception among IT managers that the business is not sufficiently involving them enough in outsourcing decisions.

White said: "The reasons for outsourcing going wrong are cultural and leadership related. If you don't engage IT you are not engendering value or sharing a problem.

"The problem starts at the beginning when you don't involve IT they feel insecure and are perceived as a burden. It is creating this cynicism."

He said SLAs are the tangible point where this division is most visible and argued that the reason why many outsourcing contracts have poorly defined SLAs is because they are left with the techies.

He added: "When you outsource the issue should be quality of the actual service, not the technical details."

According to White, this disconnect between the business and technology around outsourcing is gradually being addressed.

"Cultures take a long time to change," he said. "It is not easy to change it but gradually a best-practice approach to outsourcing is beginning to emerge. It takes a decade or so and will gradually evolve."

The study was carried out by research firm Vanson Bourne.