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Outsourcing Advisory Overview

Outsourcing transactions present challenges throughout the entire life cycle. Understanding the long-term effects of each contractual provision, how to effectively perform the governance function, and what to do at the end of the relationship are some of the essential ingredients required to successfully outsource.

  • Most organizations are unhappy with their outsourcing service provider.
  • 80% of outsourcing invoices have errors.
  • Many CIOs have experience with entering into outsourcing transactions; few have experienced an exit.
  • Service level calculations are rarely validated.
  • Transformation activities are almost never completed on time, if at all.
  • Many outsourcing contracts describe a new end state but fail to give sufficient detail as to how to arrive at it.
  • RFPs often force the providers to propose something they can’t effectively deliver.
  • Not all expected outsourcing benefits are tracked or realized.
  • Invoices are complex and often lack sufficient detail for proper validation.
  • Hundreds or thousands of change orders on a single contract are not uncommon.
  • Change orders for services contracted in the base charge are common.
  • Governance processes are often ignored until there is a problem.
  • Too many people on both sides don’t understand the contract.
  • All contracts expire, but organizations fail to create and maintain an exit plan.
  • The challenges associated with terminating an outsourcing agreement are often underestimated.

Companies today are often unable to take the long view. Individuals are busy and have too much on their plates. Understanding the life cycle of decisions, especially complex decisions, is difficult.

At Swingtide we specialize in understanding the life cycle of an outsourcing transaction. The offerings highlighted on this site cover the life cycle of outsourcing and are shown in the blue bars in the bottom half of the following chart.

Swingtide’s multi-disciplinary team of IT, finance, and sourcing advisors work together to help you have a successful outsourcing experience.

We have helped clients in all facets of outsourcing. We have helped them decide to outsource, enter transactions, effectively govern transactions, identify and resolve invoice disputes, oversee transition and transformation, perform mid-course corrections, monitor and validate service levels, manage the expiration of relationships, and successfully navigate and support many different termination scenarios.

Benefits that have been realized include:

  • Significant cost savings
  • Improved service quality
  • Resolution of disputes and claims
  • Improved relationship with provider
  • Provider support for strategic business decisions
  • Enabled changes in business strategy through outsourcing
  • Greater contract understanding through training
  • Ended bad situations with minimal business disruption
  • Established materially improved future state
  • Matched unique provider solutions with unique client needs

Some of our offerings are highlighted in the Outsourcing Advisory section of this site. In these pages we identify the offering, profile the companies that might benefit from the offering (“Ideal for Companies”), list some of the key benefits, and offer some comments on the high-level approach and deliverables. Some of these pages include references to white papers and other materials. We’ve also included some frequently asked questions and tips to help you improve your outsourcing relationships.

We hope you find this information useful and will call us if you have needs in the Outsourcing Advisory area.

Outsourcing Advisory

ISSUES, LESSONS & TIPS

Spin-offs and divestitures are a lot like outsourcing

Your co-worker today can become your service provider tomorrow. Use a formal transition agreement to document service definitions, service quality expectations, charges, metrics, governance processes, assets, licenses and third-party contracts to support an orderly and manageable transition.

More Tips