LONDON, May 21 /PRNewswire/ --

- New Survey From IT Outsourcing Consultancy and Multi Sourcing Advisors,
PA Consulting Group, Confirms That the Risks Associated With Multi Sourcing
Strategies for Managed IT Sourcing Contracts is Poorly Understood and
Significant in Value

Summary of PA Consulting Group survey results http://tinyurl.com/PAG-ITS

- According to PA Consulting Group, the IT outsourcing consultancy and
      multi sourcing advisors, over 30% of the US, UK and European 
      respondents have no appreciation of the total cost of managing their IT 
      sourcing contracts - the 'retained governance organisational cost'.

    - In light of the strong trend over the next three to five years towards
      multi-source contracts - confirmed by almost 75% of respondents - over 
      a quarter of respondents with IT sourcing contracts identified 
      integrating multiple providers as the top risk with multi sourcing, 
      with the need for strong internal governance as the second.

    - Change management programmes that define and manage IT sourcing
      contracts are being sacrificed in the name of cost saving, undermining 
      the effectiveness of the supplier/customer relationships.

    - PA Consulting Group, the IT outsourcing consultancy and multi sourcing
      advisors also found that 35% of client organisations are increasingly 
      using non-performance clauses as reasons for initiating contract 
      renegotiations, with 75% planning competitive and cost-saving 
      approaches to the restructuring. This is instead of mending failing 
      relationships, leaving the client company with persistent relationship 
      failures across multiple suppliers and high remedial costs.

    - Innovation in IT outsourcing (ITO) has generally been sidelined in
      favour of quick cost improvements. Currently, over 25% of respondents 
      report receiving no innovation at all, and of those that do, fewer than 
      5% deliver innovation that identifies new sources of revenue growth.



IT outsourcing consultancy and multi sourcing
advisors, PA Consulting Group (PA), today announces the results of PA's
International IT Outsourcing Survey 2009 http://tinyurl.com/PAG-PUBS of
large-scale enterprises across the UK, Europe and the US.

The PA Consulting Group research shows that an overwhelming emphasis on
reducing IT sourcing contracts costs has resulted in short term gains, but
caused multiple weaknesses in relationships, integration effectiveness and
innovation - which in themselves can bring cost reductions - but which leave
the organisation liable to unexpected costs to resolve failing outsourcing
contracts.

Jonathan Cooper-Bagnall, Member of PA's Management Group,
http://tinyurl.com/PAG-SOCO comments, "Poorly designed, implemented and
managed IT outsourcing contracts bring with them massive business risk, and
cost. This is especially prevalent if different suppliers are used - client
organisations must manage the integration of the different agencies and
define how they are to work together without duplication of work or gaps
being left."

Cooper-Bagnall continues, "Pouring good money after bad is a well-known
sin of business, but unless IT outsourcing arrangements are clearly defined
and closely scrutinised from the outset, that is exactly what happens. We are
seeing more and more that multi sourcing is a developing trend, making
integration of services all the more crucial. However, many 'tier one'
organisations have already had to invest heavily in teams of people to fulfil
the integration role, simply through lack of an early identification of the
need for service integration."

The survey from the PA Consulting Group, http://tinyurl.com/PAG-About the
IT outsourcing consultancy and multi sourcing advisors, also showed that
while 75% of companies reported employing a service provider that has
displayed innovation in some form during the relationship, only a third
delivered technological innovation, which might be expected with IT
outsourcing. Even fewer - less than 10% - are receiving innovations that
target the core business, and a quarter see no innovation at all.

"Organisations are quite simply missing out on the tangible benefits,
especially innovation that could and should be achieved as a result of a
strong business relationship. Organisations need to provide direction and
measurable objectives, such as cost reduction, to their suppliers, leaving
them to work out the 'how' and allowing the client organisation to concern
themselves with the management of the overall relationship," concludes
Cooper-Bagnall.

The PA Consulting Group report is based upon a survey undertaken in late
2008, using responses collated from over one hundred organisations, service
providers and lawyers of large-scale enterprises across the UK, Sweden,
Norway, the Netherlands, Denmark, Germany and the US.

About PA Consulting Group

At PA Consulting Group, we transform the performance of organisations. We
put together teams from many disciplines and backgrounds to tackle the most
complex problems facing our clients, working with leaders and their staff to
turn around organisations in the private and public sectors. Clients call on
us when they want:

- an innovative solution: counter-intuitive thinking and groundbreaking
      solutions

    - a highly responsive approach: we listen, and then we act decisively and
      quickly

    - delivery of hard results: we get the job done, often trouble-shooting
      where previous initiatives have failed.



PA is an independent, employee-owned, global firm of 3,000 talented
individuals, operating from offices across the world, in Europe, North
America, Latin America, Asia, and Oceania. We have won numerous awards for
delivering complex and highly innovative assignments, have technology
development capability that few firms can match, deep expertise across key
industries and government, and a unique breadth of skills from strategy to IT
to HR to applied technology.

defence - energy - financial services - government and public services
- international development - life sciences and healthcare - manufacturing -
postal services - retail - telecommunications - transportation

- strategic management - innovation and technology - IT - operational
improvement - human resources - complex programme delivery

For further information, please contact:
    Will Gardiner
    itpr
    +44-(0)1932-578-800



http://www.itpr.co.uk