Outsourcing's Ups And Downs

Tech executives like the savings and expertise they get from outsourcers, yet about half have canceled contracts, up from 21% a year ago. These conclusions are the gist of a survey of 210 buyers and 242 providers, which management-consulting firm DiamondCluster International Inc. released last week. Nearly 75% of buyers expect to increase IT outsourcing this year, up from 64% last year. Just 7% say they'll decrease use of onshore outsourcers, and 5% plan to reduce use of offshore outsourcers.

"The blame can't be heaped solely on the shoulders of providers," Tom Weakland, head of DiamondCluster's outsourcing advisory-services practice, said in a statement. "Many buyers are now several years into at least one outsourcing relationship, but they still lack effective measures to gauge the success of their outsourcing initiatives, which are critical for knowing and getting what you want."

Most buyers like what they get: 78% are satisfied with their outsourcing deals, up from 74% last year. But dissatisfaction also is up: 15% of buyers are unhappy with their contracts, up from 10% last year.