9. Project Delays. IT project interruptions happen in the best circumstances. But repeated delays-particularly around development projects or new technology rollouts-spell trouble. Severe and repeated delays are "a favorite way to 'meet the contract' with half the number of resources required," says Strichman of Sanda Partners. "[The vendor] can always claim that there are unforeseen technical difficulties when what they are really doing is desperately trying to meet profitability targets by broadly cutting resources."
10. Low Ranking. Most providers have a classification system for its key accounts-bronze, silver, gold, platinum. "Some of the criteria is based on the amount of currently being done or the [brand-name] status of the account but [the account ranking can also represent] how targeted it is for future growth and investment." Says KPMG's Lepeak. "A low or no ranking could be a sign of problems or at least less perceived value in the relationship."
Read more about outsourcing in CIO's Outsourcing Drilldown.