May 25, 2005
2005 Study Indicates Increased Security and Quality Concerns in Outsourcing
A recent report which surveyed 300 corporate technology-decision makers indicated that just 28 percent of organizations believe that IT outsourcing can provide major cost savings. Additionally, the study revealed a number of underlying concerns in the minds of potential outsourcers. Over half of respondents indicated that a loss of internal knowledge was a major disadvantage of outsourcing, while another 41 percent indicated that lower service quality was a major concern. Potentially the most worrisome statistic for outsourcing companies is the fact that such concerns were significantly lower just two years ago when only 23 percent indicated service quality as a major disadvantage. While this survey seems somewhat of an outlier statistically, it does coincide with the recent trend seen in many large companies who are bringing IT work back in-house. Such news raises more questions about the sustainability of outsourcing and its long-term effects on western business. vnunet.com Reports:
'For many organisations, cost is no longer the most significant benefit,' he said. 'Outsourcing has matured and, over time, perceived cost savings can be eroded by increased management time and poorly-envisioned contracts.'
Read More: Outsourcing out of favour
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