Wednesday, 29 March 2006 19:44

Outsourcing failures to cause Australian business disruption

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A new survey results reveals that Australian companies face the risk of significant business disruption because of poor outsourcing management practices. According to the survey a staggering 84% of Australian companies have no sourcing strategy at all and are behind companies in other developed economies.

According to research group Gartner's latest global IT outsourcing survey conducted among 1002 companies, 495 of which were in Asia Pacific, Australian companies were found to be less strategic in their use of outsourcing than other developed economies.

In Australia, 63% of companies who outsource use multiple service providers, with the average number being 3.4. Yet 84% of Australian companies say they have no sourcing strategy in place, making their decisions purely ad hoc. Globally, this compares to 46% of companies that don't have a formal sourcing strategy.

'Outsourcing has typically been seen as an IT or procurement issue. But this survey in Australia raises important questions about proper risk-management and business continuity, not to mention the appropriate use of shareholder or company funds,' said Rolf Jester, Gartner vice president and analyst.

'The lack of an appropriate multisourcing strategy will lead to business disruptions at best, a business disaster at worst,' he said.

'As part of their sourcing strategy, organisations must carefully examine the goals they wish to reach from outsourcing, as well as their concerns. This exercise will not only help develop a sourcing strategy, sourcing maxims and the prioritisation of goals, but it will educate various stakeholders about realistic outcomes and possible false assumptions or misperceptions currently held about outsourcing,' Mr Jester said.


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Stan Beer

 

Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

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