How To Avoid IT Outsourcing Failures

A successful IT outsourcing program gives your business access to high-level expertise. It ensures lower IT costs, better productivity, reduced risk, and lower labor costs and frees your time to focus on critical business matters. Despite these benefits, IT outsourcing programs have a high failure rate.

This could be due to poor communication, micromanaging the provider, unclear expectations, having the wrong expectations, not outsourcing the right functions, not recognizing and accepting flexibility requirements, prioritizing cost, and more. Navigating these failures safely can help ensure successful and profitable IT outsourcing. Here’s how to avoid IT outsourcing failures.

Partner With The Right Outsourcing Provider

Your business can only enjoy the benefits of outsourcing IT by partnering with the right provider. When you outsource to the best company, your business’s scope and objectives will be well understood, your needs will be tailored to your project size, and your work will be completed using the best and latest technologies.

Cyber security companies and other businesses should find reputable IT outsourcing providers with a customer-oriented approach to ensure the business partnership isn’t hampered. To find the best IT outsourcing company or agency, gather complete details on their technical expertise, professional skill set, business model, and the technologies they use. Assess previous project portfolios to determine their capability and ability to manage complicated business challenges.

The outsourcing company you pick should help you meet your business goals. Ensure a free communication flow culture between the outsourcing partner and your company. Ask for two or three reference contacts (past clients) to determine the provider’s capacity to maintain deadlines and work quality.

Set Your Outsourcing Goals

Setting clear, attainable goals is crucial to ensuring a successful outsourcing relationship. It’s the best way to help you select a suitable provider for your business while setting the foundation for effective project completion. It also helps the outsourcing company to find a profitable outsourcing strategy for satisfactory results. So, clearly define the software you need, the challenges it should help address for your company, and how quickly you want it done.

Develop A Good Communication Structure

Communication between your company and the IT outsourcing vendor is crucial for successful collaboration. Good communication ensures that outcomes are provided as anticipated, issues are limited or avoided, and problems are addressed efficiently. Assess the provider’s communication infrastructure during the negotiation phase to prevent failure. Ensure the outsourcing company guarantees prompt responses and offers multiple, clear communication channels, including email, phone calls, video conferencing, SMS, and more.

Confirm that there’s an escalation mechanism in place to ensure any disputes and issues are addressed reasonably within a standard timeline. If you’re working with an offshore provider, ascertain that time, distance, and language won’t hinder effective communication.

Pick The Right Outsourcing Engagement Model

Selecting an engagement model is essential to determining half your outsourcing venture’s success. You can choose either material and time, fixed price, or a dedicated team engagement model. These models have their pros and cons. Understanding them can help you choose the best for your business needs. When selecting an outsourcing engagement model, your aim should be maintaining the least possible risk to ensure that the project outcome is attained with optimal efficiency.

Choose Value Over Cost

While outsourcing IT is an excellent way to save costs, it shouldn’t be the only thing you focus on. Rather than focusing on cost saving you can make, concentrate on what your business can gain from the outsourcing endeavor. A good IT outsourcing partnership will allow you access to field expertise, excellent work quality, and a good work rate. You should also prioritize the provider’s experience and customer reviews when choosing who to partner with. When you give precedence to value over cost, you lower the risk of wasted resources on unsatisfactory products or outcomes.

Draft An Outsourcing Contract

An outsourcing contract is a legally binding agreement that ties your company and the outsourcing provider to the partnership terms. It helps reduce the risk of fraud while guaranteeing that the project will be delivered on schedule. Ensure your contract is written to increase confidence and make it easier to resolve arguments and misunderstandings which may result in the outsourcing venture failing.

While an outsourcing contract’s content may differ based on a company’s demands, it should generally contain the time limit the provider needs to complete the project, fees the outsourcing company has levied, and quality requirements the provider should meet.

Your agreement may also include a comprehensive explanation of the contract’s services and products, requirements or conditions to be met, provision for the contract’s termination, and the insurance required. It should also contain all the agreement’s terms and conditions to increase efficiency and lower the risk of fraud. To be prudent, you should hire a contract creation expert, such as a lawyer.


While IT outsourcing failures are common, they’re preventable. Use these tips to avoid IT outsourcing failures.

About David: Techthusiast & Avid Traveler.