Is the IT Outsourcing megadeal back?

The announcement today that CME Group has appointed Google to run its IT trading systems in a deal spanning 10 years and costing $1billion has perhaps heralded the start of a new wave of mega large IT Outsourcing Transactions (ITOs).

Last seen in the first wave of ITOs in the mid to late 1990s in the UK (a few years earlier in the US), these deals represent the truly large scale commitment of a customer to its IT supplier of choice, to run its IT infrastructure and meet the challenges of technology change over the course of that relationship. 

What could possibly go wrong, I hear you cry? Well, an awful lot, as it happens. 

The contract that the parties have signed represents an extremely complex relationship that needs to match both parties' expectations of what is to be provided, for how much and at what level of quality.

Throw in the inevitable change issues (who pays for them?), data migration and security issues (who is responsible for what?), HR issues (does the supplier now employ all of the IT work force?) and who is responsible for transitioning from the old to the new systems and taking on board existing projects? and you have the recipe for quite a debate between the contract managers/stakeholders over time.

Old school IT outsourcing lawyers have seen all this before - and we can safely say that the same old contractual issues bring up the same old disputes.

So, for those new mega suppliers and those new mega customers out there, let us hope that the relationship that you hope for in the future is reflected in the 6 inches of paper that you have just signed. It is not always the case.