Leading global sourcing advisory and benchmarking firm, Alsbridge Inc., today released a new Report on “How to Mitigate the Top 5 Risks of Outsourcing,” outlining the rewards and potential risks of IT outsourcing. Understanding these risks early in the process allows clients to better mitigate their risks and make a wise sourcing decision.
- Reduced Cost: The IT outsourcing providers, function in an increasingly competitive marketplace, and thus deliver services at a much lower price than you can do on your own.
- Improved Quality: IT Outsourcing providers invest billions of dollars in the tools and processes, to differentiate their ability to deliver high quality services at market-based costs.
- Ability to Redeploy Resources: As the provider becomes skilled at addressing operational issues, the most knowledgeable people can be redeployed into higher value planning, engineering or development work, and they are still in the organization “just in case” their skills are needed.
- Improved Delivery Capability: Innovation comes from explicitly stated requirements in the outsourcing contract.
According to Alsbridge, the bulk of substantial conflict between clients and providers, during and immediately after transition, tend to fall into one of the following categories.
- Lack of Communication: Without a structured communications plan and process that explains ‘what is happening’ and ‘why’, there will be voids that will be filled with misinformation and a reluctance to change.
- Inability to Change Behavior: Leaders must change their behavior and learn to manage expectations and outcomes and let the outsourcing provider manage how the work gets done.
- Loss of Business Knowledge: As an organization develops its transition plans it must address how knowledge will be transferred to the provider.
- Unclear Expectations: There is always a slight risk that something was not thoroughly understood and documented during the negotiation phase, and that for some reason cannot be adequately supported in the new outsourcing contract.
- Business Case Not Achieved: After the signing of the outsourcing contract, the sole focus is on the technical aspects of the transition of services, and it becomes nearly impossible, as the months go by, to track performance back to the business case.
Prior to signing an outsourcing contract or even before finalizing a decision to outsource, make sure to think about the above risks, so that you can make a better informed sourcing decision and will be better prepared to realize the benefits that an IT outsourcing relationship can provide. You can download the complete white paper How to Mitigate the Top 5 Risks of Outsourcing to further understand these risks and what you can do to mitigate them.
About Alsbridge Inc.
Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO. We’ve helped hundreds of companies reduce costs and get more value from their vendors. Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors. Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients. This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.