Why IT outsourcing can fail is a big subject. Of course, not all IT outsources do fail, but many have inherent problems that take a long time to fix. In this paper, the focus is on medium/large IT outsources, and on structural and process issues. Many of these will exhibit at least some of these points of failure.
Failure means different things to different parties: for the client organisation it usually means that the delivery of IT services is not up to the standard expected; for the outsource supplier it usually means that the account is not (sufficiently) profitable, and may even be loss-making.
Underlying these outcomes is a wide range of organisational and process failures. It is rare for these to be the ‘fault’ of individuals – indeed, many individuals in both organisations can spend their whole working days struggling to mitigate and compensate for these failures. An investigation of the underlying systems and processes can help to identify remedies and preventative actions where such are possible.
It should be stressed that although many of the fixes can be described in a single sentence, implementing them can require a considerable commitment of time, resource and expertise.
Finally, this paper does not address the issues that arise in multi-supplier outsourcing environments. Generally speaking, as well as new possibilities for failure, the failures discussed can all still occur but the consequences are frequently worse, the failures more severe in their impact on the client, and the fixes harder to achieve.
