Rise and Fall of an Information Technology Outsourcing Program: a qualitative Analysis of a Troubled Corporate Initiative

Information Technology at Twenty-First Century Icarus 
Icarus is a Fortune 1000 firm headquartered in the United States. The firm sells products 
and services predominantly in the United States, with plans for international expansion in future 
years. Icarus has global sourcing offices in multiple countries that procure raw production 
materials and a headquarters extension facility in India focused predominately on Information 
Technology operations. 
At the time of this study, the IT department was one of the firm’s largest headquarters 
teams, with two thousand five hundred employees in the United States and one thousand five 
hundred employees working at its India offices. Additionally, almost six thousand contractors 
worked for Icarus’s IT department. Approximately half of the contractors worked in the U.S. and 
India headquarters locations. The other half of the contractors worked from their own offshore 
facilities primarily in India and Latin America. More than fifty different vendors supplied the 
nearly six thousand contractors, although the majority of these resources were from five 
preferred suppliers. 
The Icarus business teams’ view of IT. 
As mentioned at the outset of this research, 
Icarus and its peer companies in the retail field faced significant disruption over the last several 

---

60 
years, driven by technology and new business models. For Icarus’s IT executives, this created an 
increasing tension between managing the costs and skills needed to maintain legacy, (tailored 
home-grown) systems and the need to invest in new technology packages. Consumers were 
demanding an increasingly frictionless experience. This in turn forced retailers to integrate once 
disparate systems (i.e. distribution, marketing, customer relationship management, point of sale, 
inventory) into an experience that appeared seamless to costumers in stores, online, and with 
mobile devices. 
The collision the brave new world of twenty-first century retailing against legacy IT 
systems eroded Icarus business teams’ tolerance for delayed gratification—if they ever had 
any—of their desire for new systems. Through the eyes of the Icarus business teams, the IT 
department took too long and spent too much to deliver new systems. The reality was probably 
somewhere between the business and IT departments’ individual perceptions. Regardless of who 
was right; the business teams had a lack of confidence in the IT department’s abilities. 
Viewing IT as a sluggish, process-laden bureaucracy, many business teams formed mini-
IT or “shadow” teams within their own departments to meet some of their specific demands. For 
its part, the IT department was bracing for a digital tsunami of sorts to transform legacy systems 
into cutting-edge platforms. Accordingly, IT executives implemented multiple strategies 
including reorganizations to improve their productivity and throughput. With pressure growing 
to implement new systems requiring skills not readily available among employees, executives 
relegated more technical work to contractors. Although these strategies yielded some initial 
success, executives likely overlooked the larger social context or what Brown and Duguid 
described as, “all the fuzzy stuff that lies around the edges” (2000, p. I). The compounding 
demands for speed, and executives’ infocentric strategies of increased contractor usage and 

---

61 
organizational changes tipped the IT department’s culture toward one of technology buyers and 
managers in contrast with their historical roles as builders and engineers. 
IT engineers, especially those who had been with Icarus for a number of years, were 
proud of the legacy systems they had built. They also wrestled with the changing nature of their 
jobs, becoming engineers in title only. Instead of spending their days coding, testing, and 
building new applications, they coordinated project activities between contractors and business 
teams. Senior engineers were less likely to spend time mentoring newer engineers in technical 
apprenticeships, and employees and contractors rarely socialized with each other outside of 
formal work settings. Using Brown and Duguid’s distinctions (2000), it became more important 
for senior engineers to educate contractors on bureaucratic “processes” than to guide these 
contractors in the “practice” of becoming craftsmen engineers. This shift toward a culture of IT 
buyers and managers also emphasized what one needed to do to get ahead at Icarus.