Outsourcing relationships need more work

Outsourcing will soar to a £70bn industry within four years and could give relief to strained IT departments. But law firm Tarlo Lyons warned that there were worrying gaps in some outsourcing agreements and likened them to a "Los Angeles marriage".

"Outsourcing is not straightforward. More effort goes into the prenuptial agreement than doing the groundwork for a viable relationship," said Tim Couldrick, partner at Tarlo Lyons.

The law firm's survey showed that four in five FTSE organisations are content with the value they get from outsourcing contractors. Despite this, Couldrick argued that one fifth of companies are still unhappy.

He blamed many contract renegotiations and terminations on a lack of honesty and inaccurate expectations. "Both sides must have a clear focus and better specifications of what is required from the deal," he said.

Maxine Holt, senior researcher at Butler Group, advised companies to assess which of its services can be delivered by an external provider.

"It no longer makes sense to provide all IT services in-house when there are efficient alternatives that have addressed the issues of control, security, cost and viability," she said.