Divorce and Reconciliation Strategies in Outsourcing

by Brian J. Dooley

While there is no question that outsourcing is developing quickly, it's equally true that outsourcing contracts -- and outsourcing relationships -- are increasingly under threat. Outsourcing in the IT sector has suffered from a noticeable failure rate and dissatisfaction, resulting in contract renegotiations. These conditions have been exacerbated by global recessionary trends stemming from the collapse of the dot-coms, September 11, and financial crises in Asia. All together, little has been done to correct outsourcing relationship issues, and buyers are now facing heightened pressure to renegotiate contracts to gain more favorable price points in an attempt to conserve capital and cut expenditures. These trends have been confirmed by a number of headline-grabbing IT outsourcing failures from major firms, but the pressures are affecting organizations across the landscape.