Finding the right supplier is the biggest IT outsourcing challenge
companies face, according to research by outsourcing advisory firm
Morgan Chambers.
The study, which surveyed 115 IT directors and chief information
officers (CIOs) from FTSE 250 companies, revealed that 53% of
executives that have outsourced believe finding the correct
supplier was the single most challenging factor in making their
decision. This was closely followed by a fear of undue dependency
on the supplier (47%).
Phil Morris, director at Morgan Chambers, said the figures
underline the importance of taking a number of factors into
consideration when choosing a supplier. "This should include
culture fit, the technical capability of the supplier, its
understanding of your business and the price," he said.
Despite the concerns about suppliers raised by respondents, the
research suggests that companies are increasingly likely to turn to
outsourcing in the future. Some 65% of IT bosses that are not
currently outsourcing said they are likely to go down the
outsourcing route in the next two years.
Companies that have outsourced were found to be generally content
with the service they are receiving. Eighty six per cent of
executives that have outsourced said they plan to continue
outsourcing.
Morgan Chambers' findings come at a time when outsourcing has
suffered a run of negative publicity. Computer Weekly revealed last
month that the Bank of Scotland, which last year merged with
Halifax Bank to form HBos, is to terminate its 10-year, £700m
outsourcing contract with IBM and bring its IT back in-house.
However, the research seems to suggest that companies have not been
put off by the experiences of HBos and IBM.
Morris also believes that companies are still likely to opt for
five- to ten-year "mega deals" - and not just in the IT arena. "We
are also likely to see mega deals in the likes of human resources,"
he said.
Morgan Chambers will be hosting a conference in Amsterdam in
October to discuss its findings in full.
IT chiefs' top 10 reasons for outsourcing
- Improving IT services and support
- Lower IT costs
- Better control of IT costs
- Allows you to concentrate on core business
- Access to IT staff and/or skills
- Economies-of-scale and support
- Improve flexibility of IT
- Shorten time to market new applications and services
- Focus on new technologies
- Off-balance-sheet IT investment.
Source: Morgan Chamberswww.advancedsourcing.co.uk/