About 60% of outsourcing projects are not going well, and are
breeding grounds for future IT disasters.
That was a core message from Phil Morris, director of outsourcing
consultancy Morgan Chambers, speaking at last week's annual
conference of The Infrastructure Forum.
Chief executives and boards must take responsibility for failure in
many cases where outsourcing goes wrong. A high proportion of
failures originated as deals made on the golf course or over
dinner, Morris said.
Other failures occurred because board members want to wash their
hands of IT. "Boards need education," he said.
Another major source of failure is where outsourced companies try
to hang on to their established hierarchies, which can lead to
duplication and shadow management.
Many problems arise when relationships go wrong, he added.
"Contracts don't fail, they just seem to because the staff
underpinning them fail. Contracts are usually written from one
perspective. Few are written with business realities in mind," he
said.
Recipe for successful outsourcing
- Continual board attention
- Continuity of board sponsorship
- Peer to peer engagement and involvement in governance at all
levels in both organisations
- Thoughtful organisational design to ensure solutions fit the
culture and functions of the user company
- Measuring success by result and value.
Source: Phil Morris, director, Morgan Chambers