Feeds

Bleak outlook for IT outsourcing

Poor communication means gov.IT projects 'doomed'

Build a business case: developing custom apps

Most government organisation's IT outsourcing (ITO) projects are "doomed before they begin", according to new research.

Government organisations and suppliers are not aligned when it comes to interpreting and agreeing IT outsourcing objectives, says PA Consulting Group's 2005/06 Understanding Misunderstanding survey, released today.

It says lack of planning and poor business cases leads to future problems, and that insufficient attention is given to planning and due diligence.

ITO does not get the "respect it deserves. It is genuine misunderstanding which puts parties at loggerheads from the outset", the survey says.

Richard Harrison, a member of PA Consulting management board, told Government Computing News: "Although government bodies are getting better they are not able to express their requirements leading to suppliers misunderstanding, despite 30 years practice."

All government respondents surveyed said their ultimate goal in using ITO to deliver business transformation was service improvement rather than cost reduction. But when suppliers were asked what their clients wanted most, 100 per cent said government bodies were after cost reduction.

"This suggests a breakdown in the negotiation process and ongoing management," the report says. "This is backed by the fact that 71 per cent said with hindsight they would increase the importance of service innovation when selecting their supplier."

Seventy nine per cent of clients, private and public, put greater importance on access to skills compared to 14 per cent of suppliers. Only 21 per cent of suppliers and 38 per cent of lawyers thought their clients articulated their objectives clearly to the supplier marketplace.

PA head of IT sourcing Fons Kuijpers said: "There is no excuse for IT outsouring deals to go wrong in a mature market. Yet even now, many IT outsourcing deals are doomed before they start because of poor business cases where key items such as costs for the retained organisation have been omitted.

"Equally worrying, suppliers and clients have different expectations of the desired outcome. This is largely due to the client's inability to articulate clearly what they seek to achieve from the deal, and partly due to suppliers pursuing their own agenda."

PA surveyed over 300 international IT chiefs in Europe, Asia-Pacific and North America, along with major global IT outsourcing suppliers and legal advisors. The majority of government bodies surveyed were in the UK.

This article was originally published at Kablenet.

Kablenet's GC weekly is a free email newsletter covering the latest news and analysis of public sector technology. To register click here.

Boost IT visibility and business value

More from The Register

next story
Just TWO climate committee MPs contradict IPCC: The two with SCIENCE degrees
'Greenhouse effect is real, but as for the rest of it ...'
Adam Afriyie MP: Smart meters are NOT so smart
Mega-costly gas 'n' 'leccy totting-up tech not worth it - Tory MP
'Blow it up': Plods pop round for chat with Commonwealth Games tweeter
You'd better not be talking about the council's housing plans
Arrr: Freetard-bothering Digital Economy Act tied up, thrown in the hold
Ministry of Fun confirms: Yes, we're busy doing nothing
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
Apple smacked with privacy sueball over Location Services
Class action launched on behalf of 100 million iPhone owners
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.