Analysts say business outsourcing must change

Many firms are outsourcing without thinking it through first, according to Gartner.

The analyst group is advising organisations to be much more disciplined in the way they handle outsourcing contracts.

Gartner outsourcing expert and VP Linda Cohen says outsourcing to date has been applied in a tactical, ad hoc way as a cost cutting exercise or as a solution to a specific problem, and instead needs to be thought out at a strategic approach.

'The aim should be to source the optimal number of external and internal resources. A perfect blend of in-and-out, focussed totally on meeting the needs of the business, an approach we call multi-sourcing,' she said.

Cohen says that solving a problem today by entering into a six or seven year contract can lead to a whole new set of problems.

'Business changes way too rapidly to think that we can focus a three, a five or a seven year deal on today's problems. A deal of that length has to speculate over time what needs are going to be,' she said.

'The only way we can do that is to directly link, a sourcing action plan with the whole business strategy, refining it and re-tuning everytime you alter that strategy.'