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Determining capabilities of IT-enabled
outsourcing service providers:
A capability model and methods
Executive summary
©Carnegie Mellon University
October 4, 2001
Version 1.0
Version 1.0 10/8/2001
Over each of the four years in Dun Bradstreet’s Barometer of
Global Outsourcing, companies have reported that between 20% and
25% of all outsourcing relationships fail in any two-year period. Half of
the relationships will fail within five years. The reasons cited for failure
are remarkably similar across all types of relationships. Nearly 70% of
the respondents note that the outsourcing supplier ‘didnt understand
what they were supposed to do’ and ‘the cost was too high and they
provided poor service.’1
Introduction
In the last few years organizations, driven by increasing competitive pressures, are
delegating one or more of their information technology-intensive business activities to an
external service provider. In spite of reported problems, more than 30% of the
organizations that have already outsourced one business process are actively searching for
additional outsourcing opportunities in other areas.2 The business processes being
outsourced range from routine and non-critical tasks, which are resource intensive and
operational in nature, to strategic processes that directly impact revenues. The rapid
evolution of the global telecommunications infrastructure, and the increasing availability of
bandwidth, has facilitated the design and delivery of outsourcing services from
geographically distributed locations.
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