Lack of trust blights outsourcing projects

There is not enough mutual trust between local authorities and their IT outsourcing suppliers, warns a new report from the Society of IT Management (Socitm).

Councils are spending at least £4bn on outsourcing, according to Socitm's calculations, with the typical contract worth £6m per year and lasting seven and a half years.

But the user group said: "There is little evidence for mutual trust: indeed, some councils are cynical about the true motives of their 'partners'."

It also found that user satisfaction is likely to be lower when the service is outsourced.

Socitm said that partnership deals can work very successfully, cutting costs and providing additional capacity and capability. But success means building a trusting relationship, it said.

Local authorities should not turn to outsourcing to get rid of a problem. "Managing a difficult issue at arm’s length is significantly more difficult than tackling it directly," the report points out.

It also warns the procurement process can often feature "naivety and lack of honesty" on both sides, and this can introduce problems at the very beginning of the relationship.

And too many contract or partnership management teams are defensive and are inadequately resourced, the report said: "They reach for the contract and impose penalties and service credits rather than working with the partner to solve the problem."

Socitm found only one example of a supplier who could earn a bonus for achieving service standards above the specification, while almost every contract had penalty clauses, which it said "seems a little one-sided for a partnership style of operation".

Martin Greenwood, programme manager for Socitm Insight told silicon.com that too many deals break down for reasons that are preventable in hindsight.

"There are some relationships around that are genuinely different and they tend to be councils that have been through the hoops once before," he said.