These were two of the main conclusions from a panel debate on outsourcing organised by the National Outsourcing Association earlier this month.
Nada Kakabadse, research professor at Northampton University's business school, said companies are losing sight of the real value of outsourcing by focusing solely on cost cutting.
"Many companies are looking at the issue in the short term but not really considering further down the track. Outsourcing has to be right for an organisation and deciding to do it on cost alone could end in disaster," she said.
The trend for UK companies to move IT systems and jobs to low-cost countries such as India has attracted opposition from unions. High street banks including Barclays have signed agreements with finance union Unifi guaranteeing terms and conditions for IT staff affected by outsourcing.
To head off opposition to offshore deals and possible strike action, IT directors need to spend time winning the support of staff and unions, said Kakabadse.
Rory Murphy, assistant general secretary at Amicus, said offshore deals had become a standard feature of UK business, but added that there needed to be adequate consultation with staff.
"Many companies are guilty of bad consultation. It is important to talk to trade unions and staff representatives early on in the outsourcing process. Communication at the earliest stage is key."
Nigel Roxburgh, a founding director of the NOA, which represents suppliers and user organisations, said, "The marketplace is changing - firms need to be competitive on a global basis as well as nationally. Tupe [Transfer of Undertakings Protection of Employment Regulations] is core to the outsourcing argument and involving the unions at the right time is critical."