Outsourcing projects are at risk of failure because they are driven by cost savings rather than a desire to improve the efficiency of business processes.
A survey of 400 IT and finance decision makers in private and public sector companies across the UK commissioned by Unisys found that the finance department views outsourcing almost entirely as a means to cut costs, even in organisations where IT is represented at board level.
Paul Bevan, strategic marketing director at Unisys, explained that understanding business objectives, rather than a desire to slash budgets, needed to be the driving force behind outsourcing decisions.
"Even in sectors where IT representation at board level is good, such as financial services, and where the relationship between IT and finance is considered better, the IT director's influence dropped away dramatically and the finance director was much more instrumental in the decision making process about outsourcing," he said.
"Outsourcing has come from a history of 'sunset' areas that are technologically difficult or bitty, or because it's a time consuming activity not perceived to add a lot of value.
"It's no coincidence that, as we go into a recession, instances of outsourcing go up, but outsourcing is becoming more complex where it's questionable whether real cost savings are to be gained."
The research also found that, while two thirds of private companies had already embarked on or were considering outsourcing projects, enthusiasm is not being mirrored to the same extent in the public sector, where less than half outsource IT functions.
Earlier this year analyst firm Gartner predicted that 50 per cent of IT outsourcing arrangements would fail in the next 12 months because of bad management.
At the same time, poor employee communication is also causing uncertainty, affecting employees' performance and threatening outsourcing projects.
One in five staff claim that they first hear about an outsourcing contract though the grapevine rather than official communication channels.
A separate survey sponsored by IT services provider Steria found that more than half of employees suffer from reduced productivity, and almost a quarter make errors in their work, during the outsourcing process due to high levels of stress.
The company warned that human resources departments need to play a strategic role in the outsourcing process, particularly given widespread misunderstandings about legislation that protects outsourced employees.
But 51 per cent felt that outsourcing had a positive effect on their career, and 68 per cent said that they provide a better service than they did before outsourcing.
"Treating staff badly, not giving them the information they deserve, and not caring for affected employees is not simply bad practice, it's a false economy," said Kim Lambert, director of managed services at Steria.
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