77% of IT staff say outsourcers invent work for profit

Undertaken at the recent Infosecurity Europe 2011 event, in London, and mirrored at RSA Conference 2011 in San Francisco, the study shows that the relationship between many outsourcing companies and their clients is at breaking point. No fewer than 77% of IT professionals who work in organisations that use outsourcing say their outsourcers have made up work to earn extra money. Worryingly, the survey also reveals that 43% of IT professionals work in organisations that have outsourced a significant portion of their IT. However, the real shock comes with 62% of respondents saying that, compared to their original plans, outsourcing agreements have cost them more than anticipated. Only 11% said they are paying less than they originally expected, while 27% reckon their outsourcing agreements have cost "significantly more than planned". Philip Lieberman, president and CEO of Lieberman Software, says the findings should not be surprising: "IT outsourcing has been an exercise in reducing expenses and passing along HR issues to others. The unfortunate by-product of this quest for lower costs and fewer headaches is a situation where corporate collective knowledge, as well as loyalty and intellectual talent, has been lost." He regrets the passing of the time when IT was seen as "the lever arm of the company" – a group that could use technology to make the organisation more competitive. "Industry analysts and consultants in the area of business process management came up with the idea that every job could be fully described and outsourced to the lowest bidder… Given that the advice came from a 'credible source', executives were able to achieve remarkable reductions in cost – until business challenges began to appear that required flexibility, corporate knowledge, and dedication to the company. "The experts never considered dedication and loyalty as elements in their 'process reengineering'. It was deemed as not quantifiable… What I see today, and what this survey confirms, is that many organisations are growing frustrated with IT departments that consist largely of outsourced employees who come and go at the whim of outsiders. "If organisations are going to outsource IT they must measure their outsourcers' performance across the appropriate set of criteria – not only cost, but resiliency, transparency and data security," concludes Lieberman.