Better internal managers can improve the service,
quality, cost ofoutsourced projectsby 20% to
40%.
This was a key finding of research by the
London School of Economics for
LogicaCMG, a UK IT services
firm.
Firms will spend almost 60% of their IT budget with external
suppliers by 2012, and the cost of managing the contracts will rise
from 10% to 12% of the contract value by 2010, said Leslie
Willcocks, LSE's professor of technology, work and
globalisation.
Willcocks said companies that outsource IT projects should keep
key skilled staff in-house or risk losing control over the
projects. "Relationship management through senior management
attention, contract, structure and refined capabilities can create
a 20% to 40% difference on service, quality, cost and other
performance indicators."
But organisations are putting short term cost cuts before proper
management of the projects. The result is a loss of control,
inadequate service, and constant renegotiation because of a lack of
strong internal leadership and project management, said
Willcocks.
Firms must retain leadership, business systems thinking,
relationship building, architectural planning and design and
informed buying to make outsourcing cost-effective, he said.