If you think managing the risk of IT projects is all about throwing everything over the fence to an external supplier, think again.
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Contents 
High-risk areas
Mitigate don't hesitate
Written in ink?
IDC: Loss of control the biggest risk
Gartner's Oz VP sourcing |
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Iain Blacklaw, vice president of service delivery at EDS Asia Pacific, says if you look at the "catastrophic" outsourcing contract failures to date in Australia in which projects were way over time and budget, and he says there has probably been one in every major bank, insurance company, and manufacturing company, the reasons were the same.
"Lack of scope, lack of good people, and lack of process and checks and balances to see what's going on. There are very few people who understand how to manage projects well, to successfully complement business processes, and allow business processes to be derived," says Blacklaw.
With outsourced deals generally becoming more fragmented, the effect of getting things wrong is increasing. James Longwood, research vice president, sourcing, at Gartner Asia Pacific says any cross-ESP issues are becoming more difficult to manage as companies move towards more selective sourcing contracts. "For example there might be boundary problems -- is it the database, the central application, the network or the desktop the real problem and what happens when each ESP points the finger at the other ESPs in the service delivery change?" he asks.
On the flip side, from a contractual perspective, flexibility when things go wrong is a possible upside of selective sourcing, says James Hunter, head of outsourcing at Cap Gemini Australia.
"The very fixed, very robust contracts offered very little in the way of flexibility and there were all these issues about what the contract said and what was actually happening. The dilemma was between staying with a contract or not complying with it and trying to deliver something that makes sense," he adds.
Blacklaw says the positive slant of outsourcing is that an ESP "might have the testosterone or the commercial backing to just say no to a suggestion, and give reasons." But that's the positive slant, he says. "The negative slant is that by having an outsourced contract in place there may be an expectation that the corporation has transferred accountability which clearly lies within their responsibility. The provider might say 'you outsource to me, I do all this stuff, and then let's test it,' but if the client has put together a poor test case they might not find any errors in the solution," says Blacklaw. And whose fault is that?
