The Biggest IT Outsourcing Failures You Can’t Miss

I’ve witnessed countless outsourcing failures firsthand throughout my career. That gut-wrenching moment when a client realizes their offshore project has collapsed despite significant investment? It happens more often than the industry admits.

Why do these outsourcing disasters occur? The root causes typically include:

• Communication barriers between teams using different collaboration tools
• Cultural misunderstandings that derail Agile methodologies
• Inadequate vendor management processes
• Poor risk assessment before project kickoff

The consequences can devastate businesses – from IBM’s $125 million contract termination with Indiana to Royal Bank of Scotland’s massive IT failure that left thousands without access to their accounts.

This article breaks down real cases where cost-benefit analysis was overlooked, resulting in substantial financial damage across healthcare, banking, and government sectors. You’ll discover how insufficient due diligence and service level agreement breaches created outsourcing partnership breakdowns.

I’ll walk you through proven strategies to strengthen your outsourcing governance models and protect against hidden costs and data security breaches when working with vendors in India, the Philippines, or Eastern Europe.

By learning from these failed offshore projects, you’ll gain practical knowledge to implement effective outsourcing risk management techniques and avoid the common pitfalls that plague organizations using Waterfall or Agile methodologies.

7 of The Biggest Modern Outsourcing Failures

I’ve analyzed numerous outsourcing disasters across industries and compiled this data-driven breakdown of major failures. Each case reveals specific vendor management problems and outsourcing pitfalls that companies should avoid when implementing their own outsourcing governance models.

IBM and Indiana

The state of Indiana hired IBM to modernize their welfare processing system using Waterfall methodology. This $1.6 billion project aimed to transform service delivery through online and phone-based claims.

What went wrong:

• Insufficient requirements specification led to misaligned expectations
• Poor knowledge transfer between state employees and IBM team
• No proper transition management plan was established
• Quality control issues surfaced immediately after launch

The system struggled with long wait times and application backlogs. Users reported consistent errors that prevented them from receiving benefits. Internal teams couldn’t resolve these issues because of communication barriers between IBM developers and state employees.

A simple Google search reveals the aftermath:

The case became a textbook example of failed IT outsourcing initiatives in government sector projects. Indiana ultimately terminated the contract and paid $125 million in cancellation fees.

Epic and Cambridge University NHS Foundation Trust

Cambridge University NHS Foundation Trust contracted Epic Systems to develop an electronic patient record system with mobile device access. This project aimed to implement the HIMSS Level 6 electronic health record standard using tablets and smartphones for clinical staff.

The implementation issues included:

1. Budget management failures – costs ballooned beyond initial projections
2. Lack of technical expertise in integration with legacy NHS systems
3. Cultural misunderstandings between US-based Epic and UK healthcare staff
4. Poor change management strategy for clinical workflow adjustments

Post-implementation, the Trust experienced a shocking 20% drop in performance metrics. Clinical staff reported receiving inaccurate patient information that threatened proper care delivery. Data integrity issues emerged because the system wasn’t correctly synchronizing with other hospital databases.

Epic’s implementation struggled with UK-specific compliance requirements that weren’t properly addressed during the planning phase. This resulted in a £200 million expense for a system that required continuous remediation.

IBM and Texas

Texas state government contracted IBM to consolidate data center operations for 27 agencies into two central facilities. Using ITIL framework for service management, the contract specified clear deliverables and timelines.

The project failures included:

• Only 5 out of 27 agencies migrated within the two-year timeframe
• Service level agreement breaches – critical system backups weren’t performed
• Resource allocation problems – insufficient staffing for migration complexity
• Technology incompatibility issues between agency systems

IBM neglected fundamental disaster recovery protocols required by Texas state regulations. This violated compliance obligations and created significant security risks for government data.

The total cost of ownership ballooned to $863 million with minimal ROI for the state government. Texas eventually restructured the deal after lengthy negotiations and contract management failures.

Cambridge University Hospital NHS Foundation Trust and Medical Software

Cambridge Hospital contracted a US-based medical software company to implement a comprehensive electronic health records system for clinicians using mobile devices. The implementation used Agile methodology but suffered from several critical problems.

Key issues included:

1. Staff training gaps led to widespread confusion about system functionality
2. Insufficient due diligence in assessing hardware requirements
3. Scope creep throughout implementation phases
4. Weak testing protocols before go-live

The most alarming outcome was the 20% productivity drop across clinical departments. Doctors reported spending more time navigating the software than treating patients. User experience issues and poor interface design contributed to widespread adoption resistance.

The Trust failed to implement proper change management strategies to help clinical staff transition to the new system. The disconnect between technical requirements and actual clinical workflows created frustration and workarounds that compromised data integrity.

Navitaire and Virgin Airlines

Navitaire provided Virgin Airlines with a reservation system, check-in software, and boarding pass functionality. The system experienced two major outages within three months of deployment, each lasting nearly 24 hours.

The consequences were severe:

• Thousands of stranded passengers worldwide
• Multiple flight cancellations affecting holiday travel
• Customer service overwhelmed with rebooking requests
• Significant brand damage to Virgin Airlines

The root causes included:

1. Inadequate performance testing under peak load conditions
2. Poor incident response planning for critical system failures
3. Missing redundancy systems required for airline operations
4. Weak disaster recovery protocols

Virgin Airlines experienced massive disruption to its flight operations during peak travel periods. The reservation system failures prevented staff from accessing passenger manifests and processing new bookings.

After extensive negotiations, both companies reached an out-of-court settlement. The case highlighted the importance of business continuity planning in mission-critical outsourcing relationships.

Queensland Health and IBM

Queensland Health contracted IBM to implement a new payroll system for its 78,000 employees using SAP and Workbrain software. This project became Australia’s most notorious IT disaster.

Initial project failures:

• IBM estimated costs at $6 million but quickly revised to $27 million
• Requirements gathering phase was rushed and incomplete
• Complex healthcare pay rules weren’t properly documented
• Knowledge transfer from existing systems was inadequate

The final cost ballooned to an astounding A$1.2 billion – a 16,000% increase over initial estimates. Even at this price, the system never functioned correctly. Healthcare workers reported systematic underpayment, overpayment, or missed payments entirely.

Key failures included:

1. Poor vendor selection process – IBM lacked healthcare payroll experience
2. Rushed implementation timeline incompatible with project complexity
3. Inadequate testing protocols before system launch
4. Queensland Health lacked internal technical expertise to properly oversee the project

The Queensland government commissioned a special inquiry into the failure, resulting in IBM being banned from future government contracts in the region.

IT Vendor and Royal Bank of Scotland

The Royal Bank of Scotland experienced a catastrophic IT failure during a routine software update that affected their entire banking infrastructure. While RBS never publicly disclosed the vendor’s identity, the impact was unprecedented in the banking sector.

The outage consequences:

• Millions of customers locked out of accounts for several days
• 30,000 social welfare payments failed to process
• Business customers unable to run payroll operations
• ATM networks completely disabled

Technical investigation revealed several critical issues:

1. Inadequate testing of updates before deployment
2. Missing rollback procedures when problems emerged
3. Poor incident response management
4. Outdated change management protocols

The bank paid £56 million in compensation to affected customers and faced regulatory scrutiny from financial authorities. This case highlighted the risks of outsourcing critical financial infrastructure without proper risk assessment and contingency planning.

The RBS failure demonstrated the importance of ISO 27001 compliance and rigorous business continuity planning in financial sector outsourcing relationships. It also revealed how technical failures can quickly escalate into regulatory and reputational crises for major institutions.

Most Common Reasons for Outsourcing Failures

After analyzing hundreds of failed outsourcing arrangements across industries, I’ve identified distinct patterns that consistently appear in unsuccessful projects. These factors align with findings from Forrester Research and Deloitte’s Global Outsourcing Survey on why outsourcing ventures collapse.

Too Tight of Deadlines

Unrealistic timelines directly contribute to quality control issues and project delays. I’ve seen this repeatedly in software development outsourcing projects:

• Agile methodology implementation rushed without proper sprint planning
• Inadequate time allocated for knowledge transfer between in-house and vendor teams
• Testing phases compressed to meet arbitrary deadlines
• Complex integrations scheduled without technical feasibility assessment

A client recently told me: “We pushed our Eastern European development team to deliver in 3 months what should have taken 6. The result? Critical security vulnerabilities and a complete rebuild.”

Solution approach: Use evidence-based scheduling tools to create realistic timelines. Build in buffer periods for unexpected challenges and prioritize quality over speed. If facing tight market deadlines, consider a phased release strategy rather than rushing a complete solution.

Mismatching Expectations

Alignment gaps between clients and vendors create fundamental outsourcing governance issues. The service level agreements (SLAs) often fail to capture detailed expectations:

1. Performance metrics defined ambiguously
2. Acceptable quality standards not clearly documented
3. Responsiveness and communication expectations unspecified
4. Escalation procedures undefined

According to a PricewaterhouseCoopers study, 55% of outsourcing partnership breakdowns stem from misaligned expectations that were never properly documented.

Prevention strategy: Develop comprehensive SLAs with SMART (Specific, Measurable, Achievable, Relevant, Time-bound) metrics. Create detailed requirements documentation with concrete examples. Establish formal sign-off processes for deliverables to ensure shared understanding before development begins.

Lack of Technical Expertise

Many organizations select vendors based solely on cost without evaluating their technical expertise. This frequently happens with:

• Software development outsourcing to teams without relevant technology stack experience
• Complex ERP implementations assigned to vendors lacking industry-specific expertise
• Data migration projects handled by teams without necessary database experience
• Security-critical applications developed without proper cybersecurity knowledge

The vendor selection process must thoroughly assess technical capabilities relevant to your specific project requirements.

Due diligence checklist:

• Review previous projects similar to yours
• Verify technical certifications (CMMI, ISO, industry-specific)
• Interview the actual development team members, not just sales representatives
• Request code samples or technical assessments for key roles

Only Considering Cost

Focusing exclusively on price leads to severe hidden costs of outsourcing. The true total cost of ownership includes:

Companies that choose the lowest bidder often spend 40-200% more than the initial contract value on fixing poor quality work. This paradoxically makes the “expensive” vendor the more economical choice when measured by project success and total investment.

ROI calculation approach: Evaluate vendors based on value delivered rather than hourly rate. Include quality, communication efficiency, and domain expertise in your assessment criteria. Calculate the complete project lifecycle cost including potential rework and maintenance requirements.

Problems with Code Quality

Quality control issues frequently emerge in software development outsourcing. Contributing factors include:

• Inadequate code review processes
• Missing test automation frameworks
• Pressure to meet deadlines over quality standards
• Inexperienced developers assigned to complex tasks

Non-technical stakeholders struggle to evaluate code quality until problems surface in production. By then, the cost of remediation is 5-10x higher than addressing issues during development.

Mitigation strategy: Implement continuous integration/continuous deployment (CI/CD) pipelines with automated testing. Require 80%+ test coverage for critical components. Conduct regular code reviews using tools like SonarQube or Codacy to maintain quality standards. Consider hiring a third-party technical advisor to evaluate deliverables if you lack internal expertise.

Poor Communication

Communication barriers frequently derail outsourcing initiatives, especially when working with teams in India, Philippines, or Eastern Europe. These challenges include:

• Time zone coordination issues delaying critical decisions
• Language barriers creating misunderstandings in requirements
• Cultural differences in handling feedback and reporting problems
• Insufficient documentation of decisions and changes

Teams operating under Agile methodology particularly suffer when communication channels break down, as the framework relies on close collaboration and frequent information exchange.

Communication framework: Establish multiple synchronous and asynchronous communication channels. Document all requirements and decisions in a shared repository. Use video for complex discussions to capture non-verbal cues. Implement project management tools like Jira or Asana for tracking tasks and deadlines. Schedule overlapping working hours with offshore teams for real-time collaboration.

Failing to View the Relationship as a Partnership

Transactional approaches to vendor relationships undermine long-term success. When clients treat vendors merely as commodity service providers rather than strategic partners, several problems emerge:

• Limited knowledge sharing reduces solution quality
• Vendors focus on meeting minimum requirements rather than delivering optimal solutions
• Short-term thinking prevents process improvements
• Low investment in relationship building impairs communication

The most successful outsourcing arrangements I’ve witnessed operate as collaborative partnerships with shared goals and mutual benefits. This partnership mindset creates a foundation for weathering challenges that inevitably arise in complex projects.

Partnership development: Include vendors in strategic planning sessions relevant to their work. Create incentive structures that reward exceeding expectations rather than just meeting minimum requirements. Invest time in relationship building beyond transactional interactions. Consider longer-term contracts with established partners to encourage deeper investment in understanding your business.

Ways to Avoid IT Outsourcing Failures

Based on my extensive work with clients recovering from unsuccessful outsourcing ventures, I’ve developed practical strategies to prevent the common pitfalls discussed earlier. These approaches have been validated through successful implementations with companies across various industries.

Determine Your Outsourcing Goals

Strategic goal setting is fundamental to outsourcing governance. Before contacting potential vendors:

1. Conduct a SWOT analysis of your internal capabilities
2. Identify specific functions suitable for outsourcing based on your core competencies
3. Establish clear business objectives for each outsourced function
4. Define measurable success criteria aligned with your overall business strategy

Many organizations skip this critical step, diving straight into vendor selection without clarifying what they need. I worked with a healthcare software company that tried outsourcing their entire development operation to India without first determining which components needed specialized expertise. The result? A complete project restart after six months of minimal progress.

Implementation tip: Create a structured outsourcing strategy document that answers:

• Which specific functions will be outsourced?
• What business problems will outsourcing solve?
• How will success be measured (specific KPIs)?
• What risks need mitigation?
• What internal resources will manage the relationship?

This document becomes your roadmap for vendor selection and ongoing relationship management.

Prioritize Value

While cost reduction often drives initial outsourcing decisions, focusing exclusively on price leads to failed offshore projects. The value equation must include:

A multinational manufacturing client once selected a vendor based solely on hourly rates, only to spend three times the “savings” on fixing quality issues and managing communication problems.

Selection framework: Develop a weighted scoring model that balances cost against value factors. For example:

• Technical expertise: 30%
• Industry experience: 20%
• Communication capabilities: 20%
• Cultural fit: 15%
• Cost structure: 15%

This approach prevents vendor performance shortfalls by ensuring all critical success factors are evaluated, not just price.

Use A Software Development Agreement

Contractual obligations must be clearly defined to prevent outsourcing missteps. Unlike simple service agreements, software development contracts require specific provisions:

• Intellectual property rights ownership and transfer procedures
• Specific acceptance criteria for deliverables
• Data security requirements and compliance standards (GDPR, HIPAA, etc.)
• Source code escrow arrangements
• Change management procedures with pricing formulas
• Service level agreements with penalties for non-performance
• Knowledge transfer requirements at project completion
• Termination conditions and transition assistance

I’ve seen companies use basic service contracts for complex software development projects, creating dangerous legal gaps. One SaaS startup nearly lost their entire codebase due to unclear IP ownership clauses.

Contract essentials: Work with legal counsel experienced in technology outsourcing. Consider frameworks like the SLSA (Software Lifecycle Security Assessment) for supply chain security requirements. Include specific references to relevant frameworks like Agile methodology or CMMI certification if these are required for your project.

Implement Proper Vendor Management

Vendor management problems frequently derail outsourcing initiatives. Effective governance requires:

1. Dedicated relationship managers on both sides with clear accountability
2. Regular cadence of meetings (daily standups, weekly status, monthly executive reviews)
3. Documented escalation procedures for resolving issues
4. Performance measurement dashboards with real-time visibility
5. Risk assessment reviews at regular intervals
6. Joint improvement initiatives to address emerging challenges

Without structured governance, projects drift off course through misaligned expectations and communication barriers.

Governance structure: Create a RACI matrix (Responsible, Accountable, Consulted, Informed) for all stakeholders. Implement project management tools that provide transparency into progress, issues, and decisions. Consider dual-shore management if working with teams in India, Philippines, or Eastern Europe to bridge time zone and cultural differences.

The best outsourcing partnerships function as extensions of your team rather than separate entities. This requires investment in relationship building beyond transactional interactions. Regular video conferences, occasional in-person visits (when possible), and joint problem-solving sessions help build the trust necessary for challenging projects.

FAQs on outsourcing failures

Why do outsourcing ventures fail?

Outsourcing projects typically fail due to multiple interconnected factors rather than a single cause. The primary reasons include:

• Inadequate vendor selection process that prioritizes cost over capability
• Poorly defined requirements and scope creep throughout the project lifecycle
• Weak outsourcing governance models and insufficient oversight
• Communication barriers exacerbated by geographical distance and cultural differences
• Knowledge transfer gaps between internal teams and outsourcing providers
• Unrealistic expectations regarding timelines, quality, and costs

According to Deloitte’s Global Outsourcing Survey, nearly 65% of failed projects suffer from at least three of these issues simultaneously. This creates a compounding effect where small issues quickly escalate into project-threatening problems.

Prevention approach: Implement comprehensive pre-project planning using frameworks like COBIT (Control Objectives for Information Technologies) or ITIL (Information Technology Infrastructure Library) to address each risk factor systematically.

How does communication affect outsourcing outcomes?

Communication directly impacts project success through several channels:

1. Requirements clarity: Miscommunicated requirements lead to incorrect implementations
2. Status reporting: Delayed or inaccurate status updates prevent timely intervention
3. Cultural context: Different communication styles can mask serious problems
4. Knowledge sharing: Poor documentation limits knowledge transfer effectiveness
5. Decision-making: Slow communication extends decision timelines and delays progress

Working with teams in India, Philippines, or Eastern Europe introduces additional challenges like time zone differences and language barriers. These factors can reduce effective collaboration time by 30-50% if not properly managed.

Communication strategy: Use a multi-channel approach combining:

• Synchronous tools: Video conferencing, phone calls, instant messaging
• Asynchronous tools: Project management systems, documentation repositories, email
• Structured meetings: Daily standups, weekly reviews, monthly governance sessions
• Documentation standards: Requirements templates, status report formats, decision logs

Can outsourcing lead to data security issues?

Yes, outsourcing creates specific data security vulnerabilities:

• Third-party access: External vendors require access to systems and data
• Compliance challenges: Different jurisdictions have varying data protection laws
• IP protection: Intellectual property can be at risk without proper controls
• Supply chain vulnerabilities: Subcontractors may not maintain adequate security standards

The 2021 Verizon Data Breach Investigations Report found that 15% of breaches involved third-party vendors. This highlights the importance of comprehensive security controls in outsourcing relationships.

Security framework: Implement these measures to protect sensitive information:

• ISO 27001 compliance requirements for vendors
• Data classification policies defining handling requirements by sensitivity level
• Access controls using principle of least privilege
• Regular security audits and penetration testing
• Contractual provisions with specific security requirements and breach notification procedures
• Data masking for development and testing environments

What role does culture play in outsourcing challenges?

Cultural misunderstandings significantly impact outsourcing success in several ways:

These differences often create friction when implementing methodologies like Agile or Scrum that require specific communication patterns and collaborative behaviors.

Cultural alignment strategy: Build cross-cultural competence through:

• Cultural awareness training for both client and vendor teams
• Explicit communication protocols that acknowledge cultural differences
• Joint workshops to establish shared working norms
• Regular retrospectives focused on improving cross-cultural collaboration

What are common quality issues in outsourcing?

Quality control issues appear in several forms across outsourcing arrangements:

• Inconsistent adherence to development standards
• Insufficient testing coverage and methodology
• Poor documentation of code, configurations, and decisions
• Shortcutting the QA process to meet deadlines
• Misalignment between expected and delivered quality levels

These problems typically stem from unclear quality expectations, inadequate testing processes, or misaligned incentives that prioritize speed over quality.

Quality management approach: Implement a structured quality assurance framework:

• Define explicit quality standards and acceptance criteria
• Establish automated testing requirements (unit, integration, performance)
• Implement code review processes with specific quality gates
• Create quality metrics dashboards for visibility
• Align vendor incentives with quality outcomes, not just delivery dates

How do hidden costs emerge in outsourcing?

The hidden costs of outsourcing typically include:

1. Transition costs: Knowledge transfer, documentation, and setup requirements
2. Management overhead: Additional governance and coordination resources
3. Quality remediation: Fixing defects and addressing performance issues
4. Integration expenses: Connecting vendor deliverables with existing systems
5. Security compliance: Additional measures required for third-party access
6. Knowledge retention: Maintaining internal expertise despite outsourcing

According to KPMG research, these hidden costs can add 15-65% to the quoted price of outsourcing arrangements. Companies often discover these costs only after contracts are signed and projects are underway.

Cost transparency strategy: Create a comprehensive Total Cost of Ownership (TCO) model that includes:

• Direct vendor charges (hourly rates, fixed fees)
• Internal management costs (vendor management office, coordination)
• Transition costs (knowledge transfer, documentation, setup)
• Ongoing operational integration expenses
• Quality assurance and testing resources
• Compliance and security overhead

Is outsourcing more prone to failure than in-house efforts?

Outsourcing projects face unique challenges compared to in-house development:

• Geographical distance creates communication delays and reduces collaboration
• Cultural differences require additional management attention
• Vendor reliability concerns introduce dependencies outside direct control
• Knowledge transfer becomes more complex across organizational boundaries
• Misaligned incentives may prioritize different outcomes

However, research from the Project Management Institute shows that outsourced projects don’t inherently fail more often than internal ones. The key difference is that outsourcing failures often occur due to relationship and communication issues rather than technical challenges.

Hybrid approach: Consider a mixed model combining:

• Strategic components developed in-house to maintain core competencies
• Commodity functions outsourced to specialized providers
• Near-shore options (Mexico, Canada, Eastern Europe) for culturally sensitive work
• Offshore partners (India, Philippines) for scale and cost advantages

What impacts do outsourcing failures have on a company’s reputation?

Failed outsourcing arrangements can damage corporate reputation through:

• Customer dissatisfaction when services are disrupted
• Brand damage from quality issues or security breaches
• Market perception of operational incompetence
• Employee morale issues when projects fail
• Investor concerns about management effectiveness

The Royal Bank of Scotland’s 2012 IT failure (outsourced systems update) prevented millions of customers from accessing accounts for days. This single incident cost £56 million in compensation and immeasurable reputation damage.

Reputation management: Develop contingency plans that include:

• Communication templates for stakeholder notifications
• Backup operational procedures during vendor transitions
• Escalation paths for critical service issues
• Clear accountability for dispute resolution
• Service continuity provisions in contracts

How can companies learn from outsourcing failures?

Extracting lessons from unsuccessful outsourcing ventures requires structured analysis:

1. Conduct thorough post-mortems with both internal teams and vendors
2. Document specific failure points and root causes
3. Analyze contract terms that contributed to issues
4. Review governance models and communication patterns
5. Examine decision points where different choices could have prevented problems

Leading organizations maintain a database of lessons learned from past outsourcing experiences. This institutional knowledge helps improve future vendor selections, contract negotiations, and relationship management practices.

Knowledge management approach: Create a structured lessons-learned repository with:

• Case studies of past failures categorized by root cause
• Best practices derived from successful projects
• Vendor performance history and relationship notes
• Contract clause libraries with commentary on effectiveness
• Process templates refined based on experience

Are some industries more vulnerable to outsourcing failure?

Yes, certain industries face higher risks in outsourcing arrangements due to their specific characteristics:

Financial services and healthcare organizations experience 30% higher failure rates in outsourcing initiatives according to Gartner research, primarily due to regulatory complexity and data sensitivity concerns.

Industry-specific approach: Develop specialized outsourcing frameworks that address:

• Industry-specific regulatory requirements
• Compliance documentation and audit processes
• Specialized security protocols for sensitive data
• Risk management strategies for industry-unique challenges
• Vendor certification requirements for domain expertise

Conclusion

The outsourcing failures we’ve analyzed reveal consistent patterns that organizations can learn from. I’ve documented these cases not just as cautionary tales, but as practical learning opportunities for companies implementing their own outsourcing initiatives.

Key takeaways from our examination of unsuccessful outsourcing ventures:

• Communication barriers consistently rank as primary failure drivers, especially in cross-cultural contexts
• Successful companies implement robust outsourcing governance models with clear accountability
• Service level agreements must include specific, measurable performance metrics
• Vendor selection should evaluate technical capabilities, not just cost advantages
• Risk assessment must be continuous throughout the outsourcing relationship

When analyzing cases like IBM’s failed project with Queensland Health or Epic Systems’ struggles with Cambridge NHS, the same fundamental issues appear regardless of industry: poor requirements definition, inadequate testing, and misaligned expectations.

Companies implementing Agile methodology in outsourced projects face particular challenges with daily communication and iterative development across time zones. This requires specialized governance approaches when working with teams in India, the Philippines, or Eastern Europe.

Data security breaches represent another critical concern in outsourcing relationships. As demonstrated by several high-profile failures, contractual security requirements must be paired with regular audits and compliance verification.

The most successful outsourcing arrangements treat vendors as strategic partners rather than commodity providers. This partnership approach enables joint problem-solving and shared accountability for outcomes, reducing the risk of project collapse under pressure.

By studying these outsourcing pitfalls and implementing structured governance, companies can significantly improve their chances of success. The difference between outsourcing success and failure often comes down to preparation, communication, and continuous oversight – elements entirely within your control.

If you enjoyed reading this article on outsourcing failures, you should check out this one about nearshoring.

We also wrote about a few related subjects like best countries for outsourcing, outstaffing, outsourcing to Serbia, in-house development vs outsourcing and  outsourcing to India.

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Alexander Gilmanov

CEO, SaaS specialist

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