Challenges to outsourcing
Failure rate is 40-70%Conflict of interestClient wants cheaper better serviceVendor wants profitLack of good business case ( rather than just cost cutting)Transactional outsourcing-well defined rules- 90% successCo-sourcing alliances- client and vendor jointly manage projects ( application development)-63% successStrategic partnerships- single outsource manages a bundle of services-50% success Other issues:managing communicationcultural differenceslack of internal processes for specifying work internal customer management skills.