Outsourcing by the book

IT managers will have to reinvent themselves if they want to keep pace with the growing corporate trend toward outsourcing, according to KPMG.

Launching a book into evolving outsourcing trends in Australia, the consulting firm's head of outsourcing, John Rundell said the shape of business will involve managing a smaller core operation and making greater use of outside service providers.

Entitled "The blurring boundary of the organisation: Outsourcing comes of age", the book features nine local case studies including Australia Post, T-Systems, Hewlett-Packard and Aspect Computing.

Effective service-level agreements and contracts continue to be central to the success of outsourcing with the need to acquire skills driving the use of outside service providers.

"Companies are scrapping old and highly generalised deals in favour of smaller, more focused agreements," Rundell said.

"There is also plenty of activity that goes beyond the large-scale, top-tier service providers; sometimes a customer is better off with the smaller provider who tries harder."

Trends identified in the book show the average outsourcing contract is three years rather than five to 10 years which was popular in the early 1990s and it is important to understand where loyalties lie when managing an externally sourced workforce.

Employees were more loyal to their immediate work group than the company handing out the pay cheques and it is critical to maintain good people.

The book was written by Margaret Hurley and Christina Costa.