Management consultancy Index Group, which has recently changed its name to CSC Index to reflect its Computer Sciences Corp ownership, has just released the results of its annual survey of trends in information systems and attitudes towards third party facilities management in the US and Europe. According to the survey findings, more than 33% of Fortune 500 companies in the US are outsourcing some aspect of work with information systems – mainly application development – 45%, but also high on the list were personal computer procurement and training – 42%, and telecommunications networks – 30%, the latter having grown from virtually nothing over just one year. The main reasons given for turning to third party facilties management were to cut costs, gain skills, speed development and reduce management time spent on non-critical activities. Index Group reckons that 80% of the market for facilities management will soon be split between four major players – Arthur Andersen, IBM, and Electronic Data Systems Corp, with fourth place contested by Cap Gemini Sogeti SA, Computer Sciences Corp’s CSC Consulting, and an unknown entity – possibly DEC or AT&T. Index warns that many of companies’ main problems with information systems are to do with management, and not with the technology itself – the consultancy cautions against outsourcing for outsourcing’s sake, and points out that if a facilities management contract breaks down after five years, a company could end up losing its best staff to the outsourcing agency, a problem that is likely to intensify after 1992. A better strategy in many cases, says Index’s Don Lonsdale, would be to set up a written contract for staff that manage the activities internally, bearing a specified list of expectations that would help to reduce management dissatisfaction, and force the firm to examine its needs fully before considering bringing in a third party contractor.
