Risk factors

In outsourcing, these encompass such items as: treating IT or some other function as an undifferentiated commodity, when in fact, there's some strategic component to it; lack of attention to developing the contract or service level agreements; lack of management oversight in contractual and relationship matters; failure to retain requisite in-house capabilities, knowledge and skills; incomplete due diligence in service provider selection; difficulties in constructing and adapting deals in the face of rapid business change; lack of maturity and experience in contracting, negotiating and managing the outsourcing endeavor; outsourcing for unrealized cost savings; and setting unrealistic expectations for the outsourcing outcomes.

Contributed by: Beyond the Information Systems Outsourcing Bandwagon