Interesting study from Deloitte in InformationWeek on the generally poor experiences companies have had with outsourcing.  Twenty five companies were surveyed and 70% expressed tthat they had significantly negative experiences with outsourcing.  The article says, "many companies have found that outsourcing activities can introduce unexpected complexity, add cost and friction into the value chain, and require more senior management attention and deeper management skills than anticipated. " 

What I found really interesting was further down in the article about what has tended to drive outsourcing and what has changed to make that not so valuable a strategy these days.    The author writes: 

"The problems execs from the largest companies have with outsourcing are twofold, Ken Landis, Deloitte's senior strategy principal, says in an interview. First, manufacturing outsourcing--born in the shadow World War II--served as the pattern for IT and business-process outsourcing, but the dynamics of the two are vastly different and can't be duplicated, he says. Second, services outsourcing came to the fore during a recession, and the economy isn't in an economic decline these days. In a recession, he says, cost saving is a prime corporate motivation. But when the economy is growing, other factors such as customer satisfaction and growth compete with controlling costs, and outsourcing services limit a company's control over those matters. "They see outsourcing creating a structural disadvantage," Landis says. "

So does your company outsource?  What has been your experience?  Did you try it and then back away?  Are there IT services you would never outsource because they are too strategic to the business?