Outsourcing is increasingly a way of life for IT directors and major organisations. Spending on outsourced services grew 3.1 per cent in western Europe last year, according to Gartner, outperforming the wider IT sector in many regions.

The UK has embraced the concept more enthusiastically than most, with more than one-third of European outsourcing deals taking place in this country. But it is still the most contentious and emotive area of the technology industry.

In this Special Report, we look beyond whether to outsource or not, and analyse how to meet the business objectives for organisations that have already opted to bring in outside expertise.

Experts say that skills and experience in managing external relationships will be one of the most important considerations when companies are recruiting IT executives, rather than traditional technical or staff management abilities.

Perhaps the most sensitive aspect of outsourcing is dealing with people. Anyone whose job is to be transferred to a new company can find the uncertainty and fear very stressful. In some cases, industrial action has seriously affected supplier negotiations.

The biggest growth area in outsourcing is the use of overseas service providers. But this presents its own unique challenges - different languages, cultures and time zones.

How do you make sure that the vendor is providing value for money, and that the service is keeping up with best practice? The answer is a process called benchmarking: a continuous review of the performance of your outsourcing contract.

We also investigate the legal considerations that underpin successful partnerships, and give the supplier's perspective on making the customer relationship work. Finally, we hear from some leading US companies about how outsourcing can be used to drive strategic change in your business.

Outsourcing is here to stay, but the key to success is achieving a mutually beneficial partnership between customer and supplier.