Getting the most out of outsourcing

CIOs are in need of ‘relationship counselling' to help them get the most from their outsourcing contracts, according to a nationwide survey conducted by PMP Research on behalf of IT services company Computacenter. Almost three quarters of the CIOs who were questioned from the banking, pharmaceutical, manufacturing and public sectors identified difficulty in managing relationships with partners as their biggest outsourcing headache.

That is exacerbated by the need to manage multiple relationships. Almost half of public sector organisations had more than one outsource partner, and nearly two thirds of private sector CIOs are working with several outsourcers simultaneously.

Commenting on the findings, Ben Booth, CIO at market research company MORI says: "In my experience, working with a number of partners requires a very different approach. CIOs are looking for their teams to manage the overlaps and interfaces of multivendor relationships effectively. It is only those organisations that get [the management of that set of relationships] right who will get the most out of outsourcing."

After outsourcing certain services, some CIOs observe a shift in the skill base of remaining IT staff. In the public sector, 28% of CIOs said their in-house skill set had changed. However, in the private sector, only 7% of CIOs noticed significant changes.

Despite the challenges, the number of outsourcing contracts will continue to rise, with 88% of CIOs planning to maintain or increase their outsourcing spend in the next two years. They indicated that the most important reasons for choosing to outsource were to reduce operational costs, to gain access to specialist IT skills and to enable teams to focus on core business issues.


Reasons CIOs choose to outsource
Source: PMP Research 2005

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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