Are sharks ruining the IT outsourcing market?
by Pete Canavan is Head of Support Services at Plan-Net.
42 per cent of participants in the 2012 Survey of IT Professionals – Outsourcing claimed that their IT outsourcing agreements have cost them more or significantly more than originally planned. Moreover, 64 per cent suspected that outsourcers have made up more work to earn extra money from their organisation.
These shocking results are a strong wake-up call for the industry: service providers who are taking advantage of their position of trust are ruining the market for all IT outsourcers. Sadly, it is often the larger service providers that rely on their big name to get business which are overcharging for their services, rather than concentrating on delivering an excellent service and making their customers happy.
These outsourcers usually offer set packages where all additions have an extra cost. For instance, they will support only a certain number of calls for their fixed monthly fee; if these calls increase (often due to factors outside of client control, such as system failures or sudden increase in business) then they will be billed for all the extra volume. If the client’s structure and strategy changes and they need to adapt the IT service to cater for their new needs, even when it is a small change, this will also come at a cost. It is easy, then, to run up a bill of way more than expected.
Not all providers are sharks, though: many offer transparent and flexible solutions, where they do not charge for every little change or add-on increasing their monthly fee by far more than the initially agreed price. These are normally smaller, niche providers that have calved themselves a position within the market based on the delivery of effective and efficient Services which are fit for purpose, scalable and enable their customers Service to flex without substantial investment. These suppliers compete through their consistent quality of delivery and customer feedback. They are trusted partners and therefore they behave in a trustworthy way – simple as that.
Apart from the cost of an IT outsourcing service, there is little doubt with regards to the value of this practice. The survey, in fact, revealed that 67 per cent of respondents trust the quality of the work performed by their IT outsourcers to be about the same or more than work carried out by in-house staff.