A failure to involve the IT department in outsourcing decisions is fuelling cynicism about the real motives for outsourcing — and leading to a dangerous disconnect between the board and IT managers, according to new research.
The study of 103 IT managers from mainly UK private sector organisations found only a quarter of outsourcing contracts are based on a joint decision between IT and business managers.
The research points to a disconnect where business mangers make the decision to outsource and then pass on responsibility for the service level agreements (SLAs) to the IT department, with almost 40 percent of business managers rarely involved in negotiating the SLAs.
Dr Jim White, business technologist at business service software provider Managed Objects, which sponsored the study, said there is a perception among IT managers that the business is not sufficiently involving them enough in outsourcing decisions.
White said: "The reasons for outsourcing going wrong are cultural and leadership related. If you don't engage IT you are not engendering value or sharing a problem.
"The problem starts at the beginning when you don't involve IT they feel insecure and are perceived as a burden. It is creating this cynicism."
He said SLAs are the tangible point where this division is most visible and argued that the reason why many outsourcing contracts have poorly defined SLAs is because they are left with the techies.
He added: "When you outsource the issue should be quality of the actual service, not the technical details."
According to White, this disconnect between the business and technology around outsourcing is gradually being addressed.
"Cultures take a long time to change," he said. "It is not easy to change it but gradually a best-practice approach to outsourcing is beginning to emerge. It takes a decade or so and will gradually evolve."
The study was carried out by research firm Vanson Bourne.
Talkback
Usually the motivation to outsource is fuelled by a total lack of understanding of what IT is really about (=communication; as in: can you justify the reason for your existense). Thus ending up paying so much more for so much less because if you don't really understand the business you're outsourcing you'll end up getting hurt one way or another because you will be taken advantage of. And if you do really understand the business you're outsourcing you'll often find that outsourcing costs more.
In short: bad communication leads to mutual distrust which leads to bad decisions.
And just to spice up the conversation: one might say that best results are achieved by not outsourcing the department but rather the manager of that department as long as the new manager has been made clear that outsourcing is not an option. After all, the fault is within (internal) (business) communications and that's a manager's fault.