Gartner: Be wary of outsourcing deals

IT departments should take their time when reviewing an outsourcing contract, according to Gartner. There are many reasons to be cautious or to avoid outsourcing completely. At an outsourcing conference in London last week, Claudio Da Rold, vice president and analyst at Gartner, cautioned that the market is too volatile to predict what it is going to look like in just a few months.

Not only that, outsourcing firms are looking to reduce costs by cutting staff and increasing standardization. That means you may not be getting the cream-of-the-crop staff to provide the best service. In addition, IT outsourcing pricing is set to shrink by 5 to 20 percent, according to Gartner, so you definitely don't want to be signing a contract when prices are going down, not up.

As Linda Cohen, Gartner vice president and analyst, told the conference: "Don't sign long-term deals, there won't be enduring value for you or for your service provider. The days of the ten year deals are long gone."

For more on the state of outsourcing:
- check out this CIO.com article [1]

Related Articles:
IBM will snag half of India's outsourcing work by 2010 [2]
Would Obama's tax code curb offshoring? [3]
IBM comes home to outsource [4]
CIOs shorten leash on outsourcing contracts [5]