Failed relationships equal spiralling costs with 60 percent of respondents claiming problems with their outsourcing provider are almost always people-related.

Head of KPMG's IT advisory, Egidio Zarella, said this is because sourcing arrangements are not managed correctly with 79 percent of survey respondents not even knowing the cost of selecting a sourcing provider.

Zarella said 50 percent of respondents took longer than six months to complete the Request for Proposal (RFP) part of the process, while 30 percent take longer than nine months. During this time the market has shifted.

He said organizations are in the dark when it came to measuring the value of outsourcing deals although 89 percent of respondents plan to increase their current level of sourcing.

In fact, 42 percent of outsourcing arrangements are not supported by a formal strategic measurement framework.