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

Strategy development phase. 
Executives predominantly operated without an expected 
timeline during both the Problem Identification and Strategy Development Phases for reasons not 
determined during this research. My personal observation was that there were other, higher-
priority demands for executives’ focus during this time. While SSP was deemed important, 
executives did not apply the same sense of urgency to it during it early phases. As a result, the 
Strategy Development phase lasted approximately one year. 
As just discussed in the previous section, Icarus executives made the following key 
decisions or assumptions during this phase. First, the perceived capacity problem could be solved 
by “outsourcing” an entire IT function under a managed services agreement despite the fact that 
Project Phoenix—Icarus’s only experience of a managed services agreement—was judged 
merely a qualified success and had resulted in stark taxonomic assumptions that disparaged 
contractor engineers. Next, displaced employees had the skills or could be trained to work on 
highly differentiated work on other teams. Finally, the Supply Chain software development work 
was the best outsourcing candidate as it fit the GSM criteria for non-differentiated work and 
could “free up” nearly one-hundred Icarus employees to be reassigned to differentiated work. 
Solution development phase. 
Solution Development was the longest of the phases; it 
spanned nearly one and a half years from executives’ decision to outsource the Supply Chain 
software development work and the date the SSP contract was awarded to ComTech. Richard 

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and Donald tasked a Working Team of their up and coming senior managers to develop a 
communication plan informing employees about SSP, select a vendor, develop an onboarding 
plan for the vendor, and work with Human Resources to develop a plan to reassign impacted 
employees to new positions. This team also included vendor management specialists from my 
team to support contract negotiations. 
One of the most critical deliverables from the Working Team was an “interaction model” 
for how the SSP vendor would work with different IT teams. Despite the time devoted to 
building an elegant interaction model, many IT teams outside of SSP would go on to ignore or 
never fully accepted the notions that Supply Chain development was non-differentiated and that 
a vendor could fully take over work performed by employees. In particular, the Phoenix Era 
taxonomy would not permit a vendor to have as much or more power than Icarus IT employees. 
Furthermore, the interaction model was not designed with an engineering focus. In Brown and 
Duguid’s terms (2000), the interaction model enumerated the “processes” for navigating the 
bureaucracy of Icarus’s IT department; it did not consider the “practice” of engineering Supply 
Chain software. I provide a comprehensive analysis of IT executives’ decision-making and 
communication rituals during this critical phase in the following chapter.