I just read an inspiring article by Waseem Hussain ‘How deadlines can kill your outsourcing deal in India‘. He summarized some of the talks that were held last week on the Nordic IT Sourcing & Innovation forum. One excerpt that triggered me:
…Anthony Lamoureux of Velocity, another advisory from London, spoke. He likened the typical search for an IT outsourcing partner with using dating sites on the Internet where you “specify a series of partner preferences based on what you already like.”
Anyone who’s been involved in a vendor selection process based on RFI, RFP etc. knows how resource-hungry this approach is. But rarely ever does anyone admit that it mainly feeds the illusion that you’re avoiding a big mistake. However, as Anthony Lamoureux showed, 65 percent of outsource deals fail to meet their promises and finish early. Innovation is reduced to an outlandish thought.
What’s the most striking here is that corporations all seem to acknowledge that large RFI and RFP selection procedures almost never result in success. People spend millions on formal procedures, but what for? If 65% of deals fail, you might as well take company #5 that shows up in google?
I have investigated all possible solutions out there which can solve this problem. So far, there seems to be no effective dating site for IT outsourcing. One solution that I hear about regularly is Ariba. But this site merely structures the corporate sourcing process. I think it won’t bring that 65% towards 0%.
Of course I believe my own solution Ekipa is the answer. We’ve built a global marketplace for software teams. Matches are made on teams that have experience building the solution the outsourcer needs. Over time, we plan to extend the services to cover the whole IT Outsourcing arena. What I do see is that corporate buyers are caught into procedures that revolve around RFI’s and RFP’s. So it might take a long time before they will start using platforms like ours?