Unlike most auctions, both buyers and service provicers in an IT outsourcing transaction pay if the winning service provider offered an irrational price to get the deal. Stephen Dunn offers tips to buyers on how to avoid the winner’s curse.
Outsourcing rookies, of course, face many challenges in achieving their desired return on investment because their deals often lack one or more elements that are foundational to success. And all outsourcing relationships encounter challenges that arise in unanticipated situations. But what about experienced buyers and relationships that are more mature? What issues arise in their […]
Seven Examples of Resolving Financial Conflicts between Buyers and Providers of Outsourced Services | Article
At the point where outsourcing service providers or their customers have a conflict that will result in a monetary loss to either party, they’re walking a fine line. If they manage to resolve the issue with a mutually beneficial solution, their relationship will be even stronger than before the conflict. If not, the party that […]
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 […]
Industry media, especially over the past two years, often points out that a significantly high number of outsourcing arrangements do not deliver the promised cost savings due to “hidden” costs associated with managing the relationship. This is especially true, the reports state, in outsourcing relationships with an offshore delivery component, where administrative costs increase due […]
New capabilities, like cloud computing, software-as-a-service, mobile device web access, and data center virtualization and consolidation, are significantly changing both the possibilities and the complexities of outsourcing IT functions. Analysts predict radical change in the shape of IT “factory” functions such as end-user support and help-desk services. However, an Information Week survey notes that almost […]
Key Moments that Make or Break Outsourcing Relationships – Buyers Behaviors that Impact a Provider’s Delivery of Services | White Paper
In an outsourcing arrangement, decision makers at the buyer’s organization look to maximize the value of their outsourcing investment. They therefore look for a service provider that not only has the requisite process, industry, and technology expertise but one that also can manage to uncertainties and minimize the buyer’s risks, enhance the buyer’s agility, and […]
Days that Outsourcing Buyers Want to Forget – Study Reveals Important Factors in Service Provider Selection Criteria | Article
You know the feelings that surround a day you’d like to forget. Stress. Anxiety. Embarrassment. Regret. Revisiting a decision. Now place all of that in the context of an outsourcing relationship on a day when something goes wrong – really wrong. A revenue-generating, ERP, or payroll system goes down. A hurricane or tsunami wipes out […]
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, […]
Lynda Gratton at the London Business School has studied teams for the last five years. She explains how to encourage hot spots, a business environment where ideas and excitement ignite teams, who then solve problems and innovate.
National Life Group was unhappy with its IT supplier. It did not want to alert this supplier it was shopping, so its new supplier had a difficult time pricing the service since it could do no up-front diligence. Both buyer and supplier were surprised at the magnitude of the surprises. But they worked together through the difficult times, laying the basis for a successful future.
How do you hire 1,000 human resource employees ASAP when you’re the untested new kid on the block? That was the challenge Visteon Corporation faced right before Ford spun off the automobile parts manufacturer. Manpower Business Solutions helped the newcomer fill its roster and cut its time to hire 50 percent.
Outsourcing cannot succeed unless both parties’ interests are aligned and they can manage to overcome inherent conflicts. In deals with government clients, there will always be an inherent conflict of interests. We studied a highly successful Canadian government relationship. This article shares their relationship best practices and framework that keeps their interests aligned.
The insurer’s sluggish processes and aging technology made it nearly impossible to introduce new products quickly. And its expense-to-premium ratio was 65 percent when the industry norm was closer to 20 percent. Outsourcing included a transformation. The result: In the last 18 months, Channel Life took on 450,000 new policies, four times the number of policies it had.
Westpac conducted an analysis that confirmed that most services did not constitute core capability and that long-term capital investment was required. Comparing the cost of outsourcing versus keeping services in-house proved outsourcing was the most strategic solution.