Data collected by Blazent reveals significant errors in the typical controls used for IT outsourcing governance. The result is expensive manual processes and inaccuracies that lead to time-consuming reconciliation exercises, yield inaccurate data, and are very expensive. Without a trusted baseline, disputes are inevitable, and there is no solid foundation for their resolution. This paper [...]
Cost and price. It’s crucial that buyers understand both when it comes to outsourcing. What is the cost of providing business services internally? What elements comprise that cost? What is the price for comparable services from an outsourcing service provider? What cost elements affect the provider’s price? For the service levels it commits to perform, [...]
Mid-size companies are limited in their ability to drive continuous improvements in cost and performance for strategic sourcing of goods and materials. And it’s too costly for companies to maintain domain expertise in every category of spend and keep up with current market in each area. Outsourcing to Source One solves these problems, and a contingency-based model for pricing based on a percentage of savings achieved provides even more value.
Business environments change over time. Attorney Allen Klein shares five principles to fairly allocate costs and benefits as an outsourcing relationshiop changes over time.
Contract flexibility and integrity are significant contributors to the overall costs that a customer pays over the lifetime of an outsourcing relationship, says attorney Robert Zahler, a partner at the law firm of Shaw Pittman in Washington.
Typically in an outsourcing deal, the parties develop a baseline of where they believe the business will go, and they structure the transaction on that basis. The problem is that the baseline inevitably will be wrong at some point in a long-term relationship. The baseline assumptions are early assumptions, and it is impossible to know [...]
The industry is abuzz about the need to make outsourcing deals more flexible. All parties agree that flexibility is desirable if it can be achieved fairly. But there is a variance in opinions among buyers, suppliers, legal analysts and consultants as to how to accomplish it. Can flexibility be built into a contract? How can [...]
Whether your crystal ball suggests a bear or a bull market for 1999, the view for business process outsourcing (BPO) is unambiguously rosy. According to Richard Smith, partner, European outsourcing for PricewaterhouseCoopers…
For those who have negotiated multiple outsourcing deals over the years, there is no question that there are indeed common problems and challenges faced in almost all outsourcing deals.
Focusing on ‘What,’ not ‘How’. The contract — along with effective management — also is a key issue in any discussion of common problems. Even more basic is an understanding of what outsourcing is and what it is not.
Anticipating change and the likely need for future renegotiation can enable the parties to plan for it, and that preparation can provide a more cooperative environment for making changes.
Renegotiation has become a fact of life in long-term outsourcing contracts, and customers entering five to ten-year arrangements should be prepared for that.That’s the bottom line, according to Syd Hutchinson, senior consultant, COMPASS America, Inc. It’s unusual for a contract not to be renegotiated, he said. There’s no way you can see everything that far out, so you should go into these agreements prepared to renegotiate.
There’s a high rate of dissatisfaction among customers with IT outsourcing agreements, according to recent surveys by Deloitte & Touche, Coopers & Lybrand, and others. However, that dissatisfaction appears to signal the industry’s growing pains rather than its demise. The outsourcing market has continued to grow, enjoying a 15 percent to 20 percent annual growth rate for several years.
A recent Coopers and Lybrand survey of 428 high-growth companies revealed some disquieting news. Over half of the companies surveyed were dissatisfied with the overall results of their outsourcing agreements. Things, they said, just didn’t get better.
Loading ...
Outsourcing Buzz Blog Outsourcing Alert
