Outsourcing top 10 reasons why it fails

Top 10 reasons why outsourcing failCloud Outsourcing

10 reasons why outsourcing arrangements fails

  1. No clearly defined long-term strategic organizational objective is defined – the outsourcing arrangement cannot aligned be aligned to something that does not exist
  2. Outsourced solution is not managed well within the enterprise – moving something to an outsourcer that you do not do well will not make it better
  3. Unrealistic expectations – outsourcing is not an end all things will not get better just because they have been moved out
  4. Not understanding the strengths and weaknesses of the outsource provider will make it difficult to fix things that do not work there already
  5. Not having a good contract with clearly defined service levels and metrics
  6. Having an outsourcing arrangement that is set in concrete and difficult to change as operational requirements change
  7. Lack of transition management and clearly defined end points for responsibilities
  8. Poor communication patterns with inadequate points of contact and status reporting between the outsourcer and the company
  9. Insufficient information for the internal organization on what to expect and service issues
  10. Cultural differences especially if the outsourcer is not a domestic organization
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Author: Victor Janulaitis

M. Victor Janulaitis is the CEO of Janco Associates. He has taught at the USC Graduate School of Business, been a guest lecturer at the UCLA’s Anderson School of Business, a Graduate School at Harvard University, and several other universities in various programs.