The price differences over time aren't what's made outsourcing fail over time. And it's not outsourcing... It IS the misalignment of goals. Clients fail when

The price differences over time aren't what's made outsourcing fail over time. And it's not outsourcing... It IS the misalignment of goals. Clients fail when... They feel like they're paying someone to do something, so they become their agent. That agent is now assumed to do the most amazing job possible with unclear specs. -- Root: bad specs, bad product management. Providers fail when... They take on work that's unclear, or understandings may not be totally aligned. Good providers aren't just inflating hours -- they're hitting on their understanding of deliverables. If that understanding is misaligned, success is impossible. -- Root: bad specs, bad product management. Bad specs, bad PM don't cover everything (you could have bad ideas, bad design, bad devs, bad architecture, bad QA, bad adoption/inner-circle feedback processing), but it's the most common root.