Experience around the world shows that roughly two-thirds of outsourcing agreements fail to deliver the targeted benefits or create the hoped-for value for shareholders. The reason often given for this level of failure is that outsourcing is an ‘immature’ activity – a rationale that neatly absolves the senior management involved of any blame.
Maybe a little too neatly. The failure rate for mergers and acquisitions (M&A) is every bit as high as for outsourcing, but nobody tries to claim that M&A is ‘immature’. Every month brings news of a CEO losing his or her job following a failed attempt at transformation through acquisition.
In short, the responsibility for both success and failure in M&A is laid at the door of the CEO and the board. The same should be true of outsourcing.
