When it comes to outsourcing, everyone has a tale of woe. My favorite comes from a software vendor that outsourced a new development project: "They were amateurs and couldn't hit a deadline. It's also why we switched from PHP to Java. It was the wrong platform to start." Many will grumble in agreement, recalling their own horror story.

However, bigger questions loom. Who picked the platform? (The unhappy customer did.) Did the customer check the work daily? (No.) Did it have automated status reporting? (It didn’t.)

Outsourcing is a key part of every modern IT group. The problem is, we still don't seem to do it that well. Twenty-nine percent of the 530 business technology professionals in the InformationWeek Analytics 2010 Outsourcing Survey have fired a vendor within the last 12 months. (All respondents use IT outsourcing.) You can blame the partner--or grab a mirror.

Two big trends jump out from this year's survey results, and both speak to the importance of IT managing outsourcing better.

One is the growth of cloud computing and software-as-a-service initiatives--and the disturbing trend of IT trusting performance monitoring to the vendors.

The other is the fact that IT outsourcing is moving up the stack, as vendors take over increasingly strategic functions. Nearly six of 10 IT shops outsource some critical function--management, engineering or development. Nearly one-fourth keep executive and management functions in-house but look to outsource everything else. As companies rely more on outsiders, a lack of oversight, management and even monitoring can have catastrophic consequences.

The survey shows a continued rise in all types of outsourcing--everything from traditional hardware services and staffing to cloud applications and full-blown data center operations.

The full report is available at:

http://analytics.informationweek.com/abstract/13/2893/Outsourcing-Services/it-outsourcing-survey-2010-better-management-required.html

NOTE: The report is only available to paid members of InformationWeek Analytics.