Outsourcing decisions made on 'soft' issues

Technical competence is no longer the key decision point for IT directors looking to outsource, according to Bloor Research. Instead, it says ‘soft’ issues and innovative add-ons should drive the service provider selection process.

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By  Neil Denslow Published  June 27, 2002

Technical competence is no longer the key decision point for IT directors looking to outsource, according to Bloor Research. Instead, it says ‘soft’ issues and innovative add-ons should drive the service provider selection process.

Bloor suggests that the commoditisation of IT and the collaborative business environment has made outsourcing into almost a level playing field. The big players, such as IBM Global Services, CSC and EDS, all offer similar technical, management and project capabilities, so when companies decide which one to opt for, the decision is based on innovation and value add — based on their complementary products and services — together with the cultural and strategic fit with the end user.

Graham Fisher, Bloor Research, acknowledges that outsourcing can be oversold or misunderstood. “We see a lot of news stories about outsourcing deals that have failed to meet expectations. Cost savings of 90% are totally unrealistic, outsourcers are service providers not alchemists and this type of bad press makes everyone cautious about adopting outsourcing as an effective resourcing strategy,” he says.

“Often the first thought is, ‘Oh no, not outsourcing’ yet if expectations are realistic and the roles and responsibilities for both vendor and end user are clearly understood, it can make an enormous difference to an organisations business capability,” he adds.

He concludes that the soft issues are critical. Not just how well the end user gets on with the outsourcer's management, but also their position in their respective marketplaces. For example, an SMB may not be paid the necessary amount of attention by one of the global outsourcers, Fisher suggests.

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