Feeds

Big boys turn backs on offshoring

One in four bringing services back in-house

  • alert
  • submit to reddit

High performance access to file storage

Many of the world's largest organisations are turning their backs on outsourcing and one in four are actively bringing services back in-house.

A survey from Deloitte Consulting reveals that 70 per cent of respondents have had significant negative experiences with outsourced projects. Just under half, 44 per cent, did not see outsourcing contracts achieving significant cost savings.

In fact 57 per cent of respondents said they had had to pay for services they believed were included in the cost of the original contract. Almost half of those questioned said hidden costs were the most common problem with outsourced contracts. As a result of these disappointments more than half of those surveyed have moved from long-term contracts (of about ten years) to shorter contracts of less than five years.

Ken Landis, senior strategy prinicipal at Deloitte, said the survey revealed the fundamental difference between outsourcing the making of a product and outsourcing an actual service that has to be delivered every day. Firms found that outsourcing contracts can add complexity and increase the burden and workload for managment.

The survey was carried out using face-to-face interviews with senior executives representing 25 big companies - nearly half are within the Fortune500, a quarter are privately held or public sector bodies. The average participant had annual turnover of $50bn. ®

Related stories

Swansea IT workers lose outsourcing fight
Indian call centre staff nicked for fraud
Bomb scare targets Indian software firms
Outsourcing more expensive than in-house service

Top three mobile application threats

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Ex–Apple CEO John Sculley: Ousting Steve Jobs 'was a mistake'
Twenty-nine years later, post-Pepsi exec has flat-forehead moment
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.