Most businesses are still using IT outsourcing to achieve short-term, cost-focused objectives rather than to improve business outcomes or to improve their competitiveness, according to a new Gartner survey.
The survey found that more than half of the 945 respondents identified "controlling/reducing operating costs or improving efficiencies" as the greatest benefit expected from IT outsourcing.
Fewer organisations focused their IT outsourcing initiatives on accelerating or improving business outcomes, called enhancement deals, or significantly improving or altering their competitiveness, referred to as transformation deals.
But this emphasis has its own hidden costs.
"One of the great clashes in the market today is driven by the dominant use of outsourcing to cut costs along with requirements for customised services," said Allie Young, research vice president for Gartner's Sourcing research group. "Only by foregoing customisation and moving to standardised services can the market effectively and reliably deliver the cost efficiency goals."
According to the survey, "achieve cost take-out" was identified as the foremost driver of IT outsourcing, with large organisations more frequently identifying this driver than smaller organisations. Following cost take-out, respondents equally rated "achieve speed, agility, flexibility" and "gain access to technical expertise and skills" as leading drivers.
The survey found that the top two inhibitors to IT outsourcing were data security or privacy issues and concerns about the potentially high costs of outsourcing. Respondents also admitted to concerns about holding onto their intellectual capital and the business knowledge of key employees.
Ms Young advised firms to assess not only the goals they wished to achieve from outsourcing, but also their concerns.
“This exercise not only will help in developing a sourcing strategy, sourcing maxims and prioritisation of goals, but will educate various constituents in the organisation about realistic outcomes and possible false assumptions or misperceptions that it holds about outsourcing," she said.
