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Outsourcing 'derailed by focus on ROI'.(return on investment)(Compass study)

Computer Weekly

| April 17, 2007 | Kamath, John-Paul | COPYRIGHT 2003 Reed Business Information Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

John-Paul Kamath

john-paul.kamath@rbi.co.uk

Focusing too closely on return on investment figures is the key reason for IT outsourcing projects failing, according to a study by consultancy Compass.

"Up to 65% of all outsourcing contracts worth more than [pounds sterling]20m unravel before running their full term," said Simon Scarrott, head of business development at Compass, which analysed 240 IT outsourcing contracts over 24 months.

The most common reason for failure was that the outsourcing contract did not deliver the promised cost savings. However, Compass said that the fault generally lay with users, who were putting too much pressure…

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