IT Success!: Towards a New Model for Information Technology

3.10. The limits of outsourcing

Because IT does not lend itself well to a standard client–vendor relationship, by extension the same should be true of outsourcing, which after all is a standard client–vendor relationship. Outsourcing can only really successfully be applied to those processes which meet our two conditions of low levels of specifications ambiguity and low levels of joint expertise.

The only IT process that meets these conditions is Service/support. Though usually categorized by a high level of joint expertise, it is sufficiently sequential and compartmentalized to be able to build robust processes with handover points between the two parties. And even then, this would only apply to applications which have reached a certain stage of stability and maturity, usually not before two or three years of operation. Not surprisingly, Service/support of so-called legacy applications represents the dominant market for outsourcing in IT.

Any attempts to outsource one or more of the other processes would result in the same disadvantages explained in this chapter, namely a final product which stands little chance of corresponding to real requirements and long project cycle times. This is especially true for Buy/build (though under the right conditions underlying processes like testing and QA could be outsourced). Furthermore, the situation would be exacerbated because it would be based on a legal contractual relationship between client and vendor (with little room for flexibility), ...