77% of IT Professionals say Outsourcing Companies have made up work

Key Points from the report:

• 77% of IT Professionals believe that outsourcing companies have made up work
• 43% of IT Professionals work in organisations that have outsourced a significant proportion of their IT
• 55% of respondents at companies with more than 1,000 employees say that their companies rely on IT outsourcers
• 30% of respondents at companies with less than 1,000 employees say that their companies rely on IT outsourcers
• 62% of respondents believe outsourcing agreements have cost more than anticipated
• 11% of respondents said their company paid less for the outsourcing agreement than they expected
• 27% of respondents said outsourcing agreements had cost significantly more than planned

According to the President of Lieberman Software, Philip Lieberman “Fundamentally, IT outsourcing has been an exercise in reducing expenses and passing along HR issues to others. The unfortunate by-product of this quest for lower costs and fewer headaches is a situation where corporate collective knowledge, as well as loyalty and intellectual talent, has been lost. Once upon a time, IT was seen as the lever arm of the company – a group that could use technology to make the organization more competitive, exciting and different in the marketplace. Industry analysts and consultants in the area of business process management came up with the idea that every job could be fully described and therefore outsourced to the lowest bidder.”

“Given that the advice came from a ‘credible source’ these executives were able to achieve remarkable reductions in cost and liability for a while, until business challenges began to appear that required flexibility, corporate knowledge, and dedication to the company. The experts never considered dedication and loyalty as elements in their ‘process reengineering’ – it was deemed as not quantifiable.”

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