There have been many articles written that detail all the things that go wrong in outsourcing relationships. Recent trends in off-shoring have accentuated these difficulties. With so many companies outsourcing, it is no surprise that there are many arrangements that fail. In a Deloitte survey, 39 percent of the 300 respondents reported that they had terminated at least one outsourcing contract and transferred it to a different vendor, saying they were “Dissatisfied” or “Very Dissatisfied” with their largest contract; 50 percent brought the function back in-house.
The general media is filled with examples of outsourcing deals gone wrong. Information Week reported that CIO’s took back 20 percent of off-shored IT work in 2006. Yahoo News quoted Marc Lazzari, head of Unisys operations Europe, stating that he knew of up to 10 deals worth between $890 million and $1.9 billion that were already back on the market despite having been signed less than two years earlier.
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Kate Vitasek | Faculty, Center for Executive Education
