Outsourcing: How Well Are You Managing Your Partners?
The vast majority of companies are outsourcing IT work, but are their expectations being met? Only about a third of 663 IT executives surveyed say they are "very satisfied," and half cite a host of problems: quality, missed deadlines and higheOutsourcing IT is now commonplaceeven strategic IT functions and applications are fair game for many of our 663 respondents. On the surface, successful experiences with outsourcing have much to do with its popularity, since no more than 25 percent of IT executives expressed dissatisfaction with their vendors. But our survey did uncover signs of trouble: Nearly half reported problems with their outsourcing partners, so the high satisfaction ratings may hide low expectations. It also suggests that many companies lack the skills to manage vendors well, especially since lack of resources and expertise were the top reasons for outsourcing. Meanwhile, outsourcing remains a sore point with IT staffs, particularly at large companies, where fear of losing jobs to outsourcing is causing considerable disruption. Keeping outsourcing from undermining morale could be a bigger challenge for CIOs than most seem to think. The key outsourcing issue today is not whether to outsource, but what to outsource and how to manage both the vendors and the remaining IT staff.
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Whats the Secret of Outsourcing Success?
Steve Lucas considers himself an optimist, but he doesnt have very positive feelings about outsourcers. The CIO of the not-for-profit Leukemia and Lymphoma Society has had too many run-ins with vendors promising the moon and then failing to deliver. "No question, its been a real disappointment," he says. "Account reps just want to show up and get you to sign a contract and make a big commission. They dont even keep appointments on the sales side. And forget it on the service side. I feel some days like I am in existence for them, theyre not in existence for me."