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Three steps for successful IT outsourcing
So why do so many companies stumble?

By Gemma Simpson

Published: Tuesday 02 October 2007

There are three basic steps that companies should always take - but sometimes don't - when it comes to choosing how to make an IT outsourcing deal, says analyst house Forrester Research.

Firstly, organisations should not opt for an outsourcing model without working out how it will affect and fit in with its IT landscape, according to a study.

And while this may seem like an obvious step, Forrester found companies are failing to analyse the degree of IT centralisation and the role of IT in the overall performance of the business before picking an outsourcing option.

Secondly, companies must consider how to manage IT and staff resources when outsourcing, according to the Three Pragmatic Steps to an Outsourcing Strategy report.

And thirdly, they should ensure the outsourcing model makes sound economic sense and any additional IT spending is taken into account, Forrester said.

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Taking these steps allows a company to properly evaluate what sort of IT outsourcing model will suit it best - with Forrester identifying six basic outsourcing models that businesses might follow, from global outsourcing of all IT apps and infrastructure to a vertical outsourcing of certain apps and infrastructures.

But the IT department may only have itself to blame when a company decides to outsource, according to Forrester.

Richard Peynot, senior analyst at Forrester, said discussions with companies revealed that poor quality of in-house IT is often an argument used by top management to support decisions to outsource.

Peynot added that cost savings and better IT delivery are also key drivers for outsourcing but he said punishing IT departments by outsourcing is a risky business because the company seldom considers the full range of issues involved in a successful outsource.