Outsourcing: Not All That Glitters is Gold

Outsourcing is perceived as the silver bullet of the day by many businesses, and many companies indeed benefit from it. But the dirty little secret of outsourcing has emerged: Everyone isn't happy.

By the end of the first year, more than 50 percent of the companies that have outsourced major IT functions are unhappy with their outsourcers, according to a recent Australian survey. By the end of the second year, 70 percent are unhappy. Studies by DiamondCluster International Inc. and PA Consulting Group have also uncovered significant amounts of dissatisfaction with outsourcing deals.

Doing your homework thoroughly is the best investment your organization can make in any attempt to outsource. Every corporation understands the importance of due diligence. Nevertheless, many organizations try to cut the amount of time spent on investigation before signing the contract. But short-cutting the due-diligence process increases the likelihood of dissatisfaction with your outsourcer down the road. It pays to look before you leap.

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