Outsourcing Cost Benefits all gone in a year say Gartner

Outsourcing Cost Benefits
Outsourcing Cost Benefits

Outsourcing Cost Benefits

Do outsourcing cost benefits last?

According to Gartner most companies outsource because of costs. Yet most of these cost reductions only last a year and the costs go back to old levels after that.

According to Gartner there is a lot of frustration from companies. Sometimes they don’t achieve these cost reductions at all. If they are, they don’t have them after the first year.

Indeed, says Gartner, companies are storing up long term problems for themselves. That’s without getting the cost benefits that they expect.

Astonishing from Gartner on Outsourcing Cost Benefits

That’s astonishing from Gartner.

They had always been in the forefront of those telling companies to outsource.

So, what is going wrong?

Are they now giving different advice now that outsourcing is a mature industry? Companies are now seeing the mess that they’ve got themselves into with their IT without having any of the cost benefits that they expected.

IT Outsourcers Recommending New Software

I’ve heard companies say before that the IT outsourcers start recommending new software systems to them or recommend major changes to their software systems. It all adds to the cost.

Those at the company have said that they no longer knew if what the outsourcers recommend is right for the company and if the price was right. That’s because they no longer have any expert in-house IT advice.

I’ve always felt that companies that outsource are weak companies. Management believe that outside companies must have better IT people than their own.

The IT department at any company is usually one of the least liked by other senior (and junior) people at the company. That’s because they are seen as the creator of problems.

Lost Cost opportunities

Gartner also say that long term infrastructure cost deals put in place at the signing of the IT outsourcing contract are costing the companies money. That’s because they are not able to take advantage of the falling hardware and software costs that are happening everywhere. Outsourcing cost benefits don’t last.

Well, what next!

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