The New Norm
The current challenging economic conditions are driving
additional outsourcing activities. However, the need for companies
to achieve greater efficiencies and reduce budgets means that
customers are being forced to do more with less. In addition, the
pace of technological change is accelerating and companies need to
be able to swiftly react to unanticipated changes in the
marketplace or otherwise fall behind the competition.
With outsourcing contracts historically having terms ranging
from five to ten years, the industry has reached a point where
there are examples of high profile failures—and the hidden
risks and causes of these failures can be identified more easily.
Recent examples of cases that have ended up in court include the
dispute between Ericsson and H3G, arising out of the termination by
H3G of an IT outsourcing contract, and the well-publicised case
between BSkyB and EDS/HP, where EDS/HP paid BSkyB a reported
£318 million in damages.
