Bad relationships lead to failing outsourcing deals

Not maintaining strong relationships throughout the lifetime of an outsourcing project is a key reason why such contracts fail, according to research.

A joint survey carried out by international law firm Bird & Bird and sourcing consultancy Quantum Plus questioned outsourcing customers in detail about how success can be achieved.

Continuity of personnel, strong governance and alignment of expectations are key hallmarks of success.

Bird & Bird partner and head of the firm's IT group Roger Bickerstaff said, “Outsourcing arrangements that are launched with fanfares of publicity often flounder once the initial glamour of the contract award has worn off, and the hard grind of operational reality has taken hold.”

He said firms said the crucial period came between two and four years into a deal.

Bickerstaff said problems occur “when relationships are not consistent, when, in particular, the senior people initially involved lose sight of the key objectives of their outsourcing."

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