7 lessons from outsourcing failures
CIO Magazine derives some lessons learned at the state level
Outsourcing remains popular, but it's fraught with opportunities for failure. CIO Magazine has analyzed several disasters in information technology outsourcing at the state level and developed a list of seven key lessons from which others can benefit.
The article examines cases such as Indiana's suing a former IT outsourcing provider for $1.3 billion for breach of contract, and a seven-page letter from the chief information officer of Texas citing "chronic failures" in a four-year outsourcing relationship.
One lesson the article offers: "When the going gets tough, the tough go public."
Writes author Stephanie Overby: "When their outsourcing partners fail to deliver, state CIOs use a tool seldom wielded by their corporate counterparts — publicity. 'In the private sector, the executives tasked with managing the service provider relationships are largely accountable for making the sourcing a success, otherwise they run the risk of being replaced,' [says Adam Strichman, founder of outsourcing consultancy Sanda Partners.] 'When things don't go so well , [they] keep the deliberations private.' Many corporate IT deals also involve an offshore element that the customer may not want public. "
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