As IT outsourcing moves well into its third decade, IT decision makers have made great strides in maturity, managing to avoid some common and costly pitfalls of the practice.
However, there are a number of common — and costly — pitfalls that persist, as well as some emerging errors IT leaders are making with their latest outsourcing deals. Taking care to avoid these outsourcing missteps will go a long way toward fostering IT services engagements that achieve their intended results.
Focusing on procuring the lowest price for pre-defined solutions is less common than in the past, says Abhishek Sharma, vice president of pricing assurance with outsourcing consultancy Everest Group. “Manifestations of this could be frequent change requests and demand for ad-hoc specialist resources that come at a premium fee, both of which dilute the business case and impact the confidence in outsourcing,” Sharma says.
Companies are struggling to compete in the dynamic digital era, so it’s only natural that they look to their IT service providers for help. The only problem is that it’s nearly impossible to write an RFP for disruption.
“Clients complain that they don’t get creativity and innovation from their service provider. However, they also want to run this procurement process in a traditional RFP manner with tight rules with no flexibility,” says Jimit Arora, a partner with IT services at Everest Group. “Our experience suggests that in a majority of situations it is not the service providers but the enterprises that are the true limitation for achieving innovation.”