LAWFUEL – The Legal Newswire – Not maintaining strong relationships throughout the lifetime of an outsourcing project is a key reason why outsourcings fail according to a joint survey carried out by international law firm Bird & Bird and sourcing consultancy, Quantum Plus.
The results of the survey are also timely in view of the recent comments made by Joe Harley, CIO at the Department for Work and Pension, who asked why as many as 70% of government technology-based projects and programmes ultimately fail.
The survey carried out by Bird & Bird and Quantum Plus sheds significant light on why outsourcing arrangements fail and what makes them more likely to succeed, finding strong evidence that companies can make an important difference to the success of their outsourcing by maintaining strong relationships throughout the lifetime of a contract. Continuity of personnel, strong governance and alignment of expectations are key hallmarks of success. The survey also revealed considerable resistance to in-sourcing as the preferred solution at the end of a lifecycle.
Commenting, 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 awards has worn off and the hard grind of operational reality has taken hold. We interviewed a number of experienced practitioners and specifically asked them about the crucial period between two and four years into the deal, when the original enthusiasms have often begun to dissipate. Our survey revealed that one of the key reasons why outsourcing contracts fail is when relationships are not consistent, when in particular, the senior people initially involved lose sight of the key objectives of their outsourcing.”
Eleanor Winn, Managing Director of Quantum Plus, added:
“The survey has confirmed what outsourcing practitioners always knew – that although companies contract with companies, it is the relationship between people that leads to success or failure. Well thought through governance structures which clarify roles and responsibilities and give specific procedures for handling change, innovation, escalation and disputes avoid ambiguity and give a shared framework within which people can develop relationships that work.”
The survey was based on a series of interviews with experienced practitioners working in customer and service provider organisations in both the public and private sectors and also through the completion of an online questionnaire. Interviewees were typically involved in a mid-to advanced stage in the life time of a typical 5 year outsourcing project. IT outsourcing represented the bulk of the arrangements covered by the survey with over 60% including IT Infrastructure, 53% Application Management and 38% Telecoms Management. Finance and Accounting was the business process outsourced by the most surveyed organisations.
For more information on this survey please contact Natalie Arestis, PR Manager (020 7905 6248), Roger Bickerstaff (020 7415 6160) or Eleanor Winn (07966 242665)