The results are in! Lieberman Software surveyed attendees at the recent Infosecurity Europe 2011 event in London and RSA Conference 2011 in San Francisco*. The data we gathered shows that the relationship between many outsourcing companies and their clients is near a breaking point.
According to the survey, an astonishing 77% of IT professionals who work in organizations that use outsourcing say their outsourcers have “…made up…” work in order to earn extra money.
Breaking things down a bit further, the survey reveals that 62% of respondents said that compared to their original plans, their outsourcing agreements had cost them more than anticipated, while only 11% said they paid less than they had originally expected. Perhaps most surprisingly, 27% of participants said their outsourcing agreements had cost “…significantly more than planned”.
To be honest I’m not surprised by these results, and those who have put their faith in the hands of the outsourcing industry shouldn’t be surprised either. Fundamentally IT outsourcing has been an exercise in reducing expenses and passing along HR issues to others. The predictable outcome is a loss of corporate collective knowledge and the squandering of intellectual talent.
Outsourcing began as a tool for executives to achieve significant reductions in cost and liability. But anyone who runs a business will tell you that there’s never an end to new challenges that require flexibility, corporate knowledge and real dedication to solve. The “experts” who promoted outsourcing never considered dedication and loyalty as elements in their process re-engineering – it was deemed as not being quantifiable.
What I see today, and what this survey confirms, is that many organizations are growing frustrated with IT departments that consist largely of outsourced employees who come and go at the whim of outsiders. If organizations are going to outsource IT they must measure their outsourcers’ performance across the appropriate set of criteria – not only cost, but resiliency, transparency and data security.
Detailed survey results can be found on the Lieberman Software website.
*The survey took place at Infosecurity Europe 2011 and RSA Conference 2011. Nearly 500 IT professionals participated, all of whom are partly or wholly responsible for an outsourcing function in their organizations, and many of whom work at Fortune 100 companies.