I work in a big organisation and I've seen the IT department, especially the software development part, to increase in spending from a mere £120K to more than £2M a year (thanks to an army of contractors). I work for lawyers and they were in the impression that 1) their time were more valuable than contractors and 2) throwing monies at contractors will automate their daily task to the point where they could go away with less legal secretaries. 

Needless to say that not only the developing went crazy (we had to hire more managers to "slow down" the processes) but the improvement in the bottom line were non existent. The issue with lawyers is that they are very competent in politics and in their particular domain of law but lack very basic understanding of finance or anything IT. In the UK, personal lawyers are paid between £35K and £90K  with a median of £45K. A PA or a legal secretary is in the range of £11K to £22K. Now compare that with the cost of a contractor (£400 a day --> £100K a year) and you see that the claim to justify such expenditures of "by automating this process that take us 30 seconds we are going to make an economy of £1.5M" is pretty ridiculous. Especially when the business get accustomed to have contractors and "forget" that they are not supposed to be permanent. This lead to projects been delayed or replaced by ever more ambitious projects. 

Software wise, contractors tend to be more qualified than permanent staff which leads to a gap in knowledge when they leave. The firm needs then to keep on hiring new contractors or keep the existing ones in order to maintain the code or a certain level of service.  Also, by the time a certain "improvement" has come to fruition, the stuff that the contractors did a year and a half ago, that was supposed to bring in economy "£1.5M", is not relevant anymore and need to be replace by new workflows.

As far as I'm concern, to hire IT software developers to adapt and heavily modify a software, when your main domain is not IT, is a bit like for someone to hire car mechanics to transform their Ford Sierra into an hybrid SUV 4WD. Maybe this person believe that their Ford Sierra has aged nicely and is cheaper than a brand new SUV. This person might feel that petrol is too expensive and that a hybrid would be cheaper. But anyone with a bit of common sense would agree that although it is possible to transform a Ford Sierra into an hybrid SUV 4WD, we all know that in the long run, modifying your own car to this extend is much more expensive than buying a brand new one. In the end, you might have to adapt to the fact that you won't be driving your trusted Ford Sierra anymore ...