Based on the 2011 IDG Enterprise Outsourcing and Service Providers online survey answered by 1,176 IT leaders, substandard service quality is the main concern of most CIOs, even though 44 percent of the respondents said service level agreements (SLAs) are now stricter compared to SLAs three years ago. Other risks mentioned were security issues, loss of internal IT knowledge, and hidden fees.
Barr Snyderwine, CIO of a special events company called Hargrove, had an outsourcing strategy which started out smooth - low costs and decent service, but when it comes to IT outsourcing, the situation was different. He said that if there is a server problem, the provider will send someone over, but that still takes some time. “If you're buying a box or replacing a drive, SLAs work great. But when you're outsourcing services, it's still all about people. Governance is key," said Snyderwine.
More than 25 percent of survey participants rated their service delivery management and measurement practices as very effective, while 43 percent said they were average, and 12 percent said they weren't effective at all. "The mentality all too often is, I have a contract in place, we've told them what we want, now they can do it all for us," says Snyderwine.
Apparently, quality issues will not hinder outsourcing operations. As a matter of fact, 36 percent of IT leaders plan to add third party IT services in the coming year. The top reasons are: lack of skills and know-how (52 percent), to lessen costs (50 percent), and supply different needs of the company (44 percent).