US companies outsource less

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US companies outsource less

Antony Savvas

US companies are reducing their IT outsourcing activity, with a growing number now taking back their IT.

While IT outsourcing is still growing, Chicago-based management consultancy DiamondCluster International said some companies were now beginning to reduce their outsourcing activity.

DiamondCluster’s annual outsourcing survey, conducted among 155 senior level executives with IT budgets of between $5m (£2.8m) and $500m (£285m), showed that 9% of companies were now reducing their onshore outsourcing activities.

In addition, 8% said they were cutting back on their offshore outsourcing activities.

Two years ago, in the same survey, no respondents said they would be reducing their outsourcing activities.

Reasons given by companies for reducing their outsourcing included outsourcing mistakes having been made last time, the wrong providers having been picked, bad contracts, or not being prepared to cope with the demands of outsourcing.

Almost half of the survey’s respondents (47%) said they had fired an outsourcing firm in the past year for not living up to expectations. The figure was just 21% in 2004.

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