Outsourcing woes exposed

 Manu Kaushik        Print Edition: December 16, 2007

Here’s some bad news on the outsourcing front. A Gartner study says companies lured into outsourcing by the promise of cost savings, the primary reason for travelling down this path, are getting into long-term problems that outweigh any short-term gains.

According to Linda Cohen, VP, Gartner, placing too much emphasis on cost reduction can lead to dissatisfaction because the savings are either unsustainable or never achieved.

Gartner advises that any organisation considering outsourcing an IT function must first establish realistic goals that will satisfy the sponsors, as well as the best interests of the organisation, and ensure older contracts are renegotiated to current market rates.

The advantages

  • Provide access to highly skilled technical resources. This also solves the issue of having to attract and retain specialised staff as full-time employees
  • Enables the internal IT organisation to refocus on business differentiating services to provide a higher level of strategic value to the business units
  • Increases the quality of service delivery
  • Creates scalability without the investment of time and capital necessary to develop that capability internally

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