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This article identifies factors that contribute to the failure of an information technology outsourcing deal. The organizational shortcoming, not knowing enough before negotiating a deal, should be the first place to lay blame. The company bought the wrong package of services, and the answer at this point is to get busy negotiating changes to the agreement. Another area to lay blame refers to broken processes. For instance, the company still owns development and architecture, but infrastructure and networks have been outsourced. For the users, the change implementation process is a single entity. For the company, it is two.

This article reports that most information technology (IT) managers agreed with a Gartner Inc. prediction that less than 30 percent of financial services companies will be outsourcing strategic projects by the end of 2006. At the Gartner Financial Services Summit, IT executives said they do favor using outsourcers for more routine tasks like maintenance or call center operations, but not for important projects where strong oversight is essential. Though the report released at the conference suggests that IT organizations should be more receptive to outsourcing, doubts about external developers persist among many managers.

The article presents predictions on the status of information technology (IT) in 2006. One anticipation points to the continuation of the furious debate over the offshoring of IT jobs and services jobs. Hackers will also successfully launch an attack on a widely used open source application. Sony Corp.'s PlayStation 3 and Nintendo Co. Ltd.'s Revolution game console will globally outsell Microsoft Corp.'s Xbox 360 by a wide margin. In addition, Linux open-source software will be more ubiquitous on the desktop, in governments, schools, and other public institutions.

This article identifies obstacles to outsourcing deals in the information technology (IT) sector in the U.S. Outsourcing deals in IT have long been marred by poor communications between buyers and suppliers, along with failures by customers to adequately manage the relationship and measure performance. At the OutsourceWorld conference in New York in October 2005, users and analysts said that outsourcing customers are facing new challenges, including regulatory requirements and shortages of experienced outsourcing relationship and contract managers. INSET: Use of Home-based Agents Challenging.