Hiring Difficulties Biggest Reason For Outsourcing

Cutter Consortium, March 7, 2000 By Cutter Consortium
(http://www.cutter.com/research/2000/crb000307.html)

According to a business-IT alignment study of 154 companies conducted by Cutter Consortium, a large percentage of companies — 29% — cite hiring difficulties as the greatest factor in their decision to outsource. When asked what primarily motivated their organization to map their IT insourcing/outsourcing options, the results were as follows:

  • Difficulty hiring skilled IT professionals: 29%
  • Lack skills inhouse: 20%
  • Budget: 14%
  • Business changes: 12%
  • CIO or senior management mandate: 12%
  • Reorganization: 7%
  • Downsizing: 2%
  • Other: 4%

Mike Epner is a senior consultant on the Cutter Consortium Sourcing Advisory Service. Says Epner, “It’s interesting that budgetary concerns were cited by only 14% as the primary motivator for contemplating outsourcing. Most respondents seem to view suppliers as a means to meet an immediate internal need, rather than as part of a long-term outsourcing strategy backed by a solid business case.”

Epner continues, “This short-term focus and lack of planning can leave an organization ill-equipped to handle the demands of managing a supplier and maintaining a viable IT staff. It can also lead to unsuccessful projects, schedule delays, and questions about what could have been done differently.”