Friday, January 5, 2007

The Winner's Curse in IT Outsourcing

In November, 2006 Leslie Willcocks and Mary Lacity published their book Global Sourcing of Business and IT Services. The book provides an excellent overview of their research on the different aspects of sourcing.

One of the chapters includes the work by Thomas Kern, Leslie Willcocks, and Eric vanHeck on the Winner' s curse in IT Outsourcing (previously published as "The Winner's Curse in IT Outsourcing: Strategies for Avoiding Relational Trauma", California Management Review, 44 (2), pp. 47-69 .2002).

The Winner's Curse is an intrigueing phenomena: the winner ends up as the loser. In the article we analysed 85 IT outsourcing projects of which 31 projects had a negative impact on the client and 15 projects showed the Winner's curse characteristics. In total 12 projects were negative both for supplier and client and ended up in relational trauma. Lessons learned are provided that overcome these situations.

1 comment: