Weak relationships undermine outsourcing

A failure to maintain strong relationships throughout the lifetime of an outsourcing project is the reason why outsourcings fail, according to a report from law firm Bird & Bird and sourcing consultancy Quantum Plus.

by Bird & Bird and Quantum Plus
Last Updated: 23 Jul 2013

The survey revealed that continuity of personnel, strong governance and alignment of expectations are the key hallmarks of success in outsourcing projects.

Roger Bickerstaff, Bird & Bird partner and head of the firm's IT group, said: "We interviewed a number of experienced practitioners and specifically asked them about the crucial period between two and four years into the deal, when the original enthusiasms have begun to dissipate. Our survey revealed that one of the key reasons why outsourcing contracts fail is when relationships are not consistent, when in particular, the senior people initially involved lose sight of the key objective of their outsourcing."

Joe Harley, CIO of the UK government's Department for Work and Pensions, recently questioned why, when £14 billion a year was being spent on public sector IT, "only 30%" of the country's technology-based projects and programmes are a success. He said that "radical change" was needed to improve day-to-day performance and the procurement process.

Eleanor Winn, managing director of Quantum Plus, said: "The survey has confirmed what outsourcing partners always knew -- that although companies contract with companies, it is the relationship between people that leads to success or failure. Well thought through governance structures which clarify roles and responsibilities and give specific procedures for handling change, innovation, escalation and disputes, avoid ambiguity and give a shared framework within which people can develop relationships that work."

The survey was based on interviews with experienced practitioners working in customer and service provider organisations in both public and private sectors and also through the completion of an online questionnaire.

Source: Bird & Bird and Quantum Plus
Strong relationships key to successful outsourcing
22 June, 2007
Review by: Nick Loney

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