Smaller multi-supplier contracts make mega deals fall out of favour

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Smaller multi-supplier contracts make mega deals fall out of favour

Nick Huber
The National Outsourcing Association conference this week in London will highlight the experiences of users and new trends

Most UK organisations believe that small outsourcing deals with a range of different suppliers give better value for money than a single mega deal, new research has indicated.

Some 52% of companies in the private sector and 57% in the public sector said they preferred using multiple suppliers, according to a survey of 100 UK organisations for supplier Computacenter.

The survey provides a snapshot of UK IT managers' attitudes to outsourcing in organisations with a turnover of between £50m and more than £10bn.

The findings generally confirm other recent research into IT outsourcing. Reducing IT running costs was the main reason cited by respondents for outsourcing, followed by improving the quality of the service and gaining access to specialist IT knowledge.

The most common areas of IT to be outsourced are websites and e-commerce technology (54%), network infrastructure (53%) and desktop systems (47%).

On the crunch issue of satisfaction with supplier performance, most users questioned (58%) said they were satisfied that service provided by suppliers.

This contrasts with a study by analyst firm Gartner, published in April, of 20 European outsourcing deals, which found that half fell short of user expectations.

Despite strong growth in the offshore outsourcing market worldwide, there was limited interest in moving IT to low-cost countries such as India. Forty four per cent said they had not considered using offshore IT services or planned to do so, compared to 27% who had and 16% who had ruled it out.

But despite the higher profile of IT directors within business, in 44% of organisations finance directors were responsible for the IT outsourcing deals.

The main problems posed by IT outsourcing were managing the supplier (70%), followed by loss of specialist IT skills (69%) and loss of control of IT infrastructure or specific functions.

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