I would say that clients who are cost conscious should concentrate more on outsourcing their IT efforts as this will give them better control over IT expenditure. As Mr Aird mentioned, reports for work done are being closely scrutinised to make sure no unnecessary hours are billed. This is hardly ever the case for in-house IT teams. 

Thought you might find this of interest....Fast Action Vital If Outsourcing Provider Melts Down, Says Alsbridge

What happens when your outsourcing provider has an unforeseen crisis, such as the recent financial meltdown of Satyam Computer Services?

“As written into your final agreement, your company is covered contractually, but being operationally prepared is a completely different matter,” said Ben Trowbridge, CEO of Alsbridge, Inc., the leading outsourcing consultancy.

View the Alsbridge article, “Preparing for the Worst: Steps to Help

Your Company Survive an Outsourcing Provider Meltdown,” at

http://www.outsourcingleadership.com/offshore_provider_jan2009.html.

In the wake of a crisis, Trowbridge recommends you:

•     Meet with your project management team for contingency planning

•     Address business critical services, processes and applications

•     Don’t expect quick, accurate communication about the provider’s viability

•     Review the policy on hiring provider employees on termination of the agreement

•     Don’t start discussions on termination of services with the provider, which could lead to degraded services

•     Require meetings between your project management office and the provider account executive who is receiving updates about contingency planning

When an otherwise viable provider suffers a debilitating event like a financial or legal scandal, its client base remains strong and attractive to competitors.  In the event a vendor changes control, breaks up, or goes out of business, its competitors will quickly target those clients and seek to take over operations quickly.  Organizations’ contingency plans should account for the probability that other providers will come knocking on the door and must be evaluated quickly to keep operations going.

When starting a relationship with any outside software services provider, put a disaster recovery plan in place internally that allows for a Satyam-like scenario, Trowbridge said. 

For more information on outsourcing advisory services, contact Alsbridge at 214-696-6410 or visit www.Alsbridge.com.  For more original research and insight on outsourcing topics, visit www.Outsourcingleadership.com.

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NOTE TO EDITORS: For more information on this topic, please view these stories:

The Dallas Morning News: Scandal in India Creates Opportunity For Dallas Firms: 1/28/09: http://www.alsbridge.com/news-events/archives/53/Scandal-in-India-creates-opportunity-for-Dallas-firms.html.

Information Week: Satyam Crisis Puts Indian IT Industry -- And Customers -- On Edge: 1/17/09: http://www.alsbridge.com/news-events/archives/51/Satyam-Crisis-Puts-Indian-IT-Industry-And-Customers-On-Edge.html.

About Alsbridge

Alsbridge, Inc. is an award-winning global advisory firm, providing unparalleled expertise in information, technology and business process outsourcing, shared services, finance and accounting, and benchmarking. The firm is fact-based and client-focused, with a proven methodology that fosters success.  Alsbridge defines client goals and scope, finds the best cultural fit with providers, refines the best solutions and eases transitions and implementation. Founded in 2005, Alsbridge is the proven, effective difference. For more information, visit www.Alsbridge.com.