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