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

Vendors. 
Not all vendors were created equal in the eyes of Icarus executives. They 
viewed Indian vendors, including their “preferred partner” TechStaff, as lacking strong leaders 
who could successfully interact with U.S. executives. Generally, Indian vendors had fewer senior 
leaders geographically located in the U.S. than did their domestic competitors. In the eyes of 
some Icarus IT executives, this inhibited their “thought leadership” and ability to work with 
autonomy: 
If you want me to go into these [Indian vendors], I [will] give you an earful. Here’s the 
biggest risk, and this is the risk I have with any of the Indian firms. One is the thought 
leadership. There’s only been a couple of firms over there that I have [seen] showing that 
they can exhibit any sort of thought leadership...their bread and butter is just cranking out 
stuff... The second issue you’re going to have with [the Indian vendors] is their U.S. 
footprint. And this is where most of the Indian firms fall down. 
When you bring in an Accenture or [a U.S. centric firm like them], you’re talking 
about program management, you’re talking about people that are going to do account 
management, people that are going to bring in strong technical people to advise us on 
what our options are. ...An Indian firm has ten thousand people to draw upon, tops, in the 
U.S. A U.S. firm has hundreds of thousands. So as long as our [business] clients are 
sitting here and the decisions about where we want to go directionally...are sitting over 
here, those Indian firms are going to be at a disadvantage because so much of that key 
role . . . is so much about the relationship that if they can’t draw upon the right number of 

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people to get the person with the right type of personality to mesh with us and our 
business. They’re going to be at a disadvantage. (Executive, personal communication, 
March 20, 2013) 
Interestingly, Icarus would later include a subset of the domestic vendors this executive 
referenced to bid on the SSP project. They either declined to participate or were removed from 
the bidding process based upon their proposals. The concern this executive articulated had more 
to do with executive-level relationship management than with the technical abilities of most 
TechStaff or other Indian laborers. Executives in the most powerful positions of the taxonomy 
wanted to interact with leaders that they closely identified with. Although TechStaff benefited 
financially as the IT department’s “preferred partner,” it was still viewed as a “second-tier” 
group as an Indian vendor within the taxonomy. 
Although Project Phoenix never delivered a full managed services model, IT executives 
declared the project a mild success because it demonstrated how Icarus IT could “mature” its 
relationship with vendors. In their eyes it was TechStaff, not Icarus, who was unprepared to 
enter into a fully outsourced or managed services relationship. Said differently, executives 
considered the hierarchical nature of Indian firms as a barrier to building the type of relationship 
they desired, and many believed TechStaff (or any Indian vendor) would struggle to be anything 
than an order taker:
All you’re doing is just running into just “run, run, run,” and the problem with that, as 
you and I know, is they’re [TechStaff workers are] real good about “running,” [i.e. task 
execution] but they’re not [going] to look at how we do it better, unless you drive it. 
They’ll do exactly what you want, but figure out how to do what they want... [with] the 
lowest cost structure...not necessarily the best way. Their culture, I mean, they’re an 

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Indian culture, I mean, they are very hierarchical. The [Indian] firms are very, “you need 
to work your way up from the bottom up. Don’t challenge authority, just execute.” 
Thought leadership isn’t awarded [sic] until you get to the very, very top. And so 
as a result of that, what you run into is . . . people that just do it and drive, do it and drive, 
make it efficient, execute, execute, execute. And if you don’t start rewarding thought 
leadership [until you get] to the top, you don’t build it. And most of the people I run into, 
they’re waiting for someone to tell them what to do, and then they’ll go do it. (Executive, 
personal communication, March 20, 2013) 
As discussed earlier in this chapter, IT executives had a historical staff augmentation relationship 
with TechStaff for over a decade prior to Project Phoenix. Icarus’s de facto “staff aug” vendor 
strategy perpetuated a paternalistic view held by a number of executives. Not surprisingly, one 
executive accurately foreshadowed that the Icarus IT taxonomy would present a substantial 
barrier to any Indian vendor’s success in a managed services relationship with Icarus: 
Whatever we ask, they’re going to do it. The problem with [TechStaff] is they’re 
struggling across the board with leadership. My concern is . . . they’ve demonstrated they 
do not have the leadership to tap into. They just grew too fast over the last eighteen 
months, not just at Icarus [because of Project Phoenix] but worldwide. . . . so if you really 
want to get to an outsource arrangement, we can’t manage them, but we’re going to find 
that we have to step into managing them because they can’t do it themselves yet, because 
they lack the leadership. (Executive, personal communication, March 20, 2013) 
This executive’s low perception of Indian vendor’s leadership and relationship management 
abilities calls into question Project Phoenix’s chances for success from its beginning. The IT 

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taxonomy did not support the general relationship requirements for a managed services 
agreement. 
TechStaff certainly benefited from the “preferred partnership” as it tripled its revenue 
without the added governance or contractual risk of a managed services agreement. Because 
Project Phoenix was not an outright failure, executives cast it as a way for Icarus to “mature” its 
vendor staffing strategies. The project’s non-failure and related “maturity” discourse would leave 
the door open for IT executives to pursue a managed services agreement again, albeit without 
adequate consideration of the habitus and taxonomy. However, the taxonomy would put any 
Indian vendor at a disadvantage in the future SSP program. Furthermore, all domestic vendors 
included in the future SSP bidding process would either decline to participate or were eliminated 
from consideration (for various reasons that remain confidential). As the executive’s comments 
above revealed, there was growing sentiment that TechStaff “grew too fast” under Project 
Phoenix, which may have worked against its consideration for SSP. The combination of these 
factors eventually restricted the potential vendors for SSP to both an Indian firm and one that had 
little or limited experience with Icarus and its IT habitus.