Nine Reasons Why IT Outsourcing Fails
While there's been some pushback in recent years, the outsourcing of major information technology functions is still alive and well among U.S. organizations. In fact, technology accounts for 28 percent of outsourcing initiatives (human resources is second, accounting for 16 percent), and companies are saving an estimated 50 to 70 percent on IT spending as a result, according to recent research. This doesn't mean, however, that there aren't a number of transition pains. For starters, outsourcing transactions typically take 23 to 46 weeks to complete, based on additional research. And half of managers surveyed say they have had to end an outsourcing arrangement due to reasons that include a lack of service quality, insufficient subject-matter expertise, poor communications or account management, and affordability issues. With that in mind, Janco Associates has come up with the following nine reasons why outsourcing initiatives fail. These reasons make it clear that pain points can come from both the outsourcing customer and provider sides, and blame can often be shared equally.