Report slams outsourcers charges but reveals improvement

Just over a year ago I wrote an article about some research carried out by automation software supplier Lieberman Software.

The survey of 250 IT professionals this year has the headline figure of 64% of respondents believing outsourcers invent work to get more profit. This is an improvement from a similar survey carried out by Lieberman of 500 IT professionals last year, which revealed that 77% believed outsourcers invent work.

Another criticism, but again an improvement on last year, is the fact that the survey revealed that 42% of respondents claimed that outsourcing contracts cost more than expected. Not good but better than last year’s survey, which revealed that 62% of respondents said that contracts cost more than planned.

And outsourcing is growing despite discontent. This year’s survey revealed that 71% of companies outsource a significant portion of their IT, compared up from 43% of respondents in a similar survey last year.

This year’s survey results:

Have your IT outsourcing agreements cost you?

Less than originally planned: 9%
About as much as originally planned: 49%
More than originally planned:: 26%
Significantly more than originally planned: 16%

Thinking only about your IT outsourcer agreements, have you ever felt that the outsourcer made up more work to earn extra money from your organisation?

No: 36%
Yes: 64%

Do you trust the quality of the work performed by your IT outsourcers:

Less than work by in-house staff: 33%
About the same as work by in-house staff: 52%
More than work by in-house staff: 15%

See last year’s survey in full.

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With regard to "making up work", this is no doubt true in some cases. But it's probably also true that outsourcers are simply charging for previously unrecognised work that used to be done for free by in-house staff. If your contract with the outsourcer doesn't cover all eventualities, then they are within their rights to charge extra for extra work.

As with so many other aspects of the outsourcing/offshoring industry, this boils down to in-house managers failing to appreciate the true value of the work, skills and experience provided by their in-house staff (at least not until it's too late - just ask RBS). But the outsourcers know the value of what they are selling you, and they are within their rights to make you pay for your own ignorance.