European businesses need to change the criteria they use for assessing outsourcing contracts, according to analyst Forrester Research.

In a new report, Europe's Services Firms Seek Outsourcing Success, Forrester urges CIOs to consider new criteria, such as the ability to manage advanced tools such as asset management and diagnostics, when choosing their outsourcing provider.

Forrester principal analyst Pascal Matzke, says that companies looking to outsource all or part of their IT infrastructure must take into account a number of areas.

'The first and most important thing that every end user needs to do is ask the question, why they want to outsource? Three answers to this question are valid: reducing cost, increasing the efficiency of a certain business or IT process or to enhance the competitiveness of the company,' he said.

'In an outsourcing situation you have many stakeholders involved, and everyone always has a different answer, so the compromise over the valid answer is very important. The problems there have been with many outsourcing contracts is that there has not been a valid, agreed answer arrived at beforehand.'

The Forrester report also says that due to rapid expansion, the outsourcing activity of some service providers may be immature, insufficiently structured and staffed, and reveals a lack of skills.

'While at a technical level there is a good depth and breadth of skills among outsourcers, they all have a skills issue at the business front end. Most of them need to recognise that there is now a much greater interdependence between IT and wider business functions,' said Metzke.