European IT directors face Hobson's choice as pressure on skills and budgets forces them to outsource large parts of their operations against their better judgement.
Despite the growth in outsourcing, many directors feel deep dissatisfaction with the performance of third parties providing the service. This is particularly true in the UK, where 25 per cent of IT directors find the performance of their outsourcer does not come up to scratch.
According to the Gartner Group, which held its Predicts 98 conference in Paris this week, staff turnover in IT organisations has increased in the past year from eight per cent to 19 per cent. Three out of every 10 vacancies cannot be filled (see Newswire 20 April).
At the same time, IT budgets are being squeezed by Year 2000 projects, new technology deployments such as Windows NT and Internet, and conversion of IT systems to support the European currency.
"It is extraordinary how many changes and difficult projects are taking place at once. It must be hell out there for many IT managers," said Roger Fulton, principal outsourcing analyst at Gartner.
Gartner Group annually conducts in-depth surveys of 500 IT directors across Europe. The survey for 1998 was completed in March and presented last week. What it shows is that companies increasingly look to third party organisations, such as outsourcers and consultants, to try to relieve the pressure on internal IT teams and in the desperate hope of reducing costs.
The drawback - IT directors are also very unhappy with the poor levels of service, vague timescales and uncooperative relationships they receive from these third parties. In the UK, more than one in four found the performance of their data centre outsourcer well below expectations - the worst in Europe.
Even desktop and network management services were found to be very unsatisfactory by up to 10 per cent of organisations across Europe, though only three per cent in the UK. These are the two areas of outsourcing that both Gartner and fellow researchers at IDC predict will show very high growth over the next three years.
Asked what criteria they used to select suppliers, IT directors unequivocally put technical expertise and ease of working together as the top factors, for the third year running.
"In mature markets the buyer is becoming more sophisticated so vendors will either have to improve their performance or reset customer expectations," said Fulton.
The main areas where European organisations would use third party providers were Internet initiatives and NT migration, closely followed by Year 2000 projects. Consulting firms would be used heavily for Emu conversion.
However, even third parties may not be able to relieve the pressure on IT directors' Year 2000 work - Fulton said Gartner analysts remain surprised and disturbed by the 10 per cent of organisations have not yet started on millennium conversion, and the many more that are not doing enough to be ready in time.
"I think there will be more than 10 per cent of IT directors who will leave their job before the Year 2000," he noted drily.
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