Misunderstandings about the services being provided can be one of the key problems with outsourcing arrangements, according to a leading Australian industry analyst.

Stories of dissatisfaction with the results of outsourcing IT services have come to light in recent months, with a survey last month finding that companies aren't always happy with the results which they get from outsourcing.

The report cited research from analyst group IDC, which found that only half the companies which had outsourced IT functions were satisfied enough with the service to continue with the current contract.

Misunderstandings about the type of deal, and what both parties are agreeing to, is a key issue according to Rolf Jester, chief analyst for the IT services market in Asia Pacific at Gartner.

Jester said this has the potential to become a deep problem. He characterises three types of outsourcing agreements entered into. This includes the more basic utility outsourcing--which is generally for providing a defineable service at an agreed price--and is usually organised by the CIO or another employee within the IT department.

More complex can be enhancement deals--outsourcing agreements which aim to improve some aspect of the business process--these tend to involve input from senior business unit managers or VPs, with the CEO or COO involved in the making the final decision.

Likewise, what Jester describes as the transformation deal--where the enterprise is outsourcing with the goal of making bigger changes within the organisation--tend to be part of a large iniaitive involving senior management or the board in the decision-making process.

Failure to factor in any fundamental changes which may need to be made to the outsourcing agreement is another area Jester sees enterprises and their outsourcing partners grappling with. "They'll all handle routine change," he said. "What they usually fail to account for--even on day one of the deal--is something which has already changed since you started negotiating [the outsourcing contract]."

"Very often the processes in the contract are very cumbersome when it comes to things like that," Jester warned. "You've got to also have processes defined for dealing with big picture change."

Aligning IT with the enterprise's overall business objectives is important, according to Jonathan Farrell, managing director at consulting firm Farrell & Associates.

Farrell said organisations often use outsourcing to reduce the enterprise's costs, but that these cost savings are not always achieved. He sees the underlying push for outsourcing typically coming from IT departments, with the ultimate decision resting with senior management or the board.

According to Farrell there is now a trend for companies to move away from outsourcing all IT, instead looking at selective outsourcing and managing more strategic IT inhouse. He cites networking, desktop support and server management as examples of areas companies selectively outsource.

He also sees enterprises looking at not getting locked into lengthy outsourcing agreements, with a tendency to choose shorter timeframes which can then be extended if the arrangement is successful.

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