This scenario changed in the next decade (’00s) which saw the Indian industry raising up on the learning curve and becoming competent to handle project management as well as higher-end project activities such as requirements elicitation and architecting. The dot com bubble burst caused a series of changes in the way IS decisions were made. Organizations became more wary of spending on IT and IT spending decisions were made by a committee involving the CIO, business sponsors, finance team etc. and not by the CIO alone. ROI (Return On Investment) measurement from IT spending became more rigorous. As a result, customers started favoring fixed-price model for software application development where end-to-end responsibilities of a project are carried by the offshore development team. With this background, the next development was commencement of strategic outsourcing initiatives where a portfolio of applications is identified and the end-to-end responsibilities of all the applications in the portfolio are transferred in a phased manner to the vendor with the IS department carrying minimum responsibilities. In a strategically outsourced project, the development team from the vendor (could be partly located at offshore and partly on-site) carries not only the end-to-end responsibilities of the project, but also manages all the stake holders of the project. With maximum possible reduction of IS staff, a strategic outsourcing initiative yields maximum cost saving but demands new competencies to manage vendors and ensure successful project delivery. The risks of project failures are higher in strategic initiatives as it provides poor visibility into how the project is being managed by the vendor. This mode of outsourcing is called the strategic outsourcing and can be summarized as below –