Research & Insight

Research & Insight

incentive

Valuing Terms in Outsourcing Contracts

Brad L. Peterson, Partner, Mayer Brown LLP

If you are an outsourcing customer, outsourcing contracts are like a three-legged stool. Their value depends on what you agree to buy, what you agree to pay and the terms. Although the agreement and the other contract terms are often extensive, outsourcing customers often underestimate, or even overlook, the value in contract terms. Why Focus …

Seven Action Areas to Strengthen an Outsourcing Relationship

Outsourcing Center, Kathleen Goolsby, Senior Writer

An outsourcing provider’s quality of services and the achievement of the agreed-upon mutually beneficial objectives are essential to success. But there are additional actions that service providers and buyers can take to boost the return on investment and increase the life expectancy of their relationships, that is, strengthen outsourcing relationships. To identify these relationship-strengthening actions, …

Combating the “Hidden” Costs of Managing Outsourcing

Outsourcing Center, Kathleen Goolsby, Senior Writer

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 …

What Companies Need to Understand about Outcome-Based Approaches in Outsourcing

Outsourcing Center, Kathleen Goolsby, Senior Writer

Among the various changes that will impact outsourcing over the next five years, Don Schulman, General Manager of Finance and Administration at IBM, says the first will be a focus on outcomes-based pricing models. “Focusing on clients’ end-to-end processes, the discussion moves to outcomes pretty fast when considering the advantage of an outsourcer doing a …

Why Shell Created an ‘Ecosystem’ of Three Suppliers When It Outsourced its IT Infrastructure

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Instead of outsourcing its IT infrastructure to just one supplier that takes care of everything, Shell chose to outsource to best-of-breed suppliers. It created an IT ecosystem designed to encourage three suppliers to work together. Read how they made multi-sourcing a success.

How Financial Incentives Encouraged the Revenue Cycle Staff to Bring in Extra Millions

Outsourcing Center, Beth Ellyn Rosenthal, Senior Writer

Northern Arizona Healthcare wanted to become one of the top three hospitals in Arizona. Today its executives believe it is as good as any hospital in America. Its new IT system provides easy-to-access, real-time data for its medical staff. The hospital established a $1 million annual bonus if Perot Systems met four stringent financial criteria in its revenue cycle work.

Source One Provides End-to-End and On-Demand Strategic Sourcing Solution for Mid-market Companies

Outsourcing Center, Kathleen Goolsby, Senior Writer

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.

Cost Savings, SLAs, and Supplier Selection Criteria Benchmarks from 2007 Outsourcing Excellence Awards

Outsourcing Center, Kathleen Goolsby, Senior Writer

Outsourcing Center’s study of 86 relationships participating in the 2007 Outsourcing Excellence Awards program revealed several significant benchmarks. A major finding: buyers felt cultural fit and a partnering relationship approach were a major key to success; they used them as supplier-selection criteria more than in the past decade of the awards relationships.

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