Contracts hinder e-deals' progress

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Contracts hinder e-deals' progress

Hazel Ward
The complexity involved in negotiating contracts is holding companies back from outsourcing e-business projects, a survey of IT professionals has revealed.

Research into the attitudes towards e-business outsourcing from The Times' top 250 UK companies, carried out by international marketing consultancy Frost & Sullivan, found that among IT executives, the biggest hurdle was the complexity of contracts and service level agreements.

Of the respondents - half of whom were chief executive officers, and half IT directors - about 77% said they outsourced all or part of their IT operations.

For e-business, the figure was only 38%, and most of this outsourcing was for basic functionality.

IT managers had different concerns than their boardroom colleagues about outsourcing e-business, the research revealed.

The main issue for chief executives was the perceived loss of control involved in e-business outsourcing, whereas IT executives highlighted concerns about the contract negotiation process.

"There is no doubt that you must be very disciplined about how you put together the contractual agreement.

"An awful lot of big outsourcing contracts have failed on the naivety and professional incompetence of the people who are outsourcing or responsible for making the outsourcing happen," said one respondent.

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