Tuesday, May 17, 2005

Big Business Turns its Back on Outsourcing

Picture credit: http://cpsu.org.au
Excel web sharing - spreadsheet collaboration over the Internet made easy with BadBlueFrom Silicon.com's management pages comes this interesting rehash of a Deloitte Consulting report on outsourcing. Bottom line: the companies that jumped on the outsourcing bandwagon first are now the fastest to jump off the wagon.

The interesting aspect, of course, is the cost-savings factor that never materialized. And why would businesses generally not save any money outsourcing?

Consider the geographic, language and time disconnects between business customers and development teams. With those disconnects in place, you'd better have world-class business analysts, architects, and project-managers acting as liaisons. And we all know how prevalent those folks are. They're about as common as $150K starter homes in Beverly Hills, California.

More than two thirds of respondents to the Deloitte survey said they have had "significant" negative experiences with outsourcing projects.

One in four participants have brought operations back in-house after realising that they could be provided better – and in some cases at a lower cost – internally.

Cost savings expected from outsourcing did not materialise for 44 per cent of respondents, and nearly two out of three ended up paying for services they thought were included in the contracts with vendors...

Silicon: Big Businesses Turn Their Backs on Outsourcing

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