Identification of IT outsourcing issues faced by Sri Lankan client organizations

Abstract

Identifying the possible concerns of IT outsourcing will enable customers to obtain the outsourcing benefits to their organization wisely. Managing their IT outsourcing relationship properly with knowing the impacts and possible risks will provide managers to mitigate the issues at earlier stages. The purpose of this research study was to discover the major ITO issues faced by Sri Lankan client organizations due to IT outsourcing and provide best practices and recommendations for client organizations to execute their IT outsourcing relationship smoothly. The broader objective of the study was to improve the outsourcing relationship from a client perspective while suggesting success/failure factors of IT outsourcing which customers should critically look at. This study mainly developed based on open-ended interviews conducted with IT service outsourced corporate clients. An empirical qualitative analysis was used with grounded theory approach to conduct an in-depth analysis of eight customer responses. Industry best practices are adopted from external outsourcing industry expertise views as well as from successful IT outsourcing adopted organizations. Research study discovered five main factors; quality, performance, employee relation, management control and transition as the mostly impacted factors in ITO relationship of Sri Lankan client organizations. The detailed issues which influence each main factor is elaborated throughout the study. Through the analysis of customer satisfactions level of the data sample, thirteen main factors were identified which could affect for success/failure of IT service outsourcing relationship. Major findings were that poor management at customer level and not having a competent person to follow up & handle the service provider has led client organization to fail in their IT outsourcing relationship. Based on the findings, assigning an IT knowledgeable management level co-coordinator to follow up and handle the service provider can be identified as a best practice. Building a strong outsourcing agreement, as a tool to align and observe outsourcing vendor delivery with outsourcing needs was also a highlighted key recommendation of this research study. In-order to have a smooth outsourcing relationship, customers need to consider detailed level of possible risks which involves with outsourcing and take necessary steps.