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The Role of Benchmarking in Outsourcing

White Paper | Category:   Benchmarking  IT Infrastructure & Applications  Business Processes...

With increasing economic uncertainty comes increasing pressure to evaluate and make the most of your outsourcing options, both from a business and an information technology perspective.

More and more benchmarking is becoming recognized as a management discipline for driving external cost-efficiency and ensuring benefits from sourcing operational activities are delivered to efficient, or specialized providers.

This white paper discusses how benchmarking can be an effective tool in an environment where requirements are constantly changing, returns are required sooner rather than later and there are ever more options for selective sourcing.

Sourcing 101: Initial Checklist and Readiness Assessment

White Paper | Category:   Strategy & Business Case  IT Infrastructure & Applications  Finance & Accounting Services...

Based on your "readiness," does your team (leadership, staff and associated stakeholders) have the discipline, experience and time to properly begin and follow through on your sourcing initiative?

The "New Market Entry" Sole Source Option

White Paper | Category:   Provider Selection  IT Infrastructure & Applications  Finance & Accounting Services...

Sole source has gotten a bad rap over the years. Most companies associate sole source with overpriced, provider favorable deals defined by their low service levels. Current conventional wisdom in the sourcing industry advocates a multiple provider approach which encourages healthy competitive tension and client leverage by spreading around project among those providers who deliver the best overall value. Sole source therefore, is anathema to procurement departments raised on the holy grail of competitive processes. However, even the most ardent supporters of the competitive process agree, albeit reluctantly, that there are the two "traditional" times when sole source may be appropriate, based on the business strategy and requirements of the buyer.

The first occasion where sole source would be appropriate, occurs when a company wants to re-new an existing outsourcing relationship. For example, if the current provider is meeting all of its contractual and intangible commitments (meaning, it is both a cultural fit and "easy to do business with"), including bringing new innovation, year-over-year productivity gains, and improvements in risk mitigation, then sole source would be the correct approach.

Because of competitive pressures, companies are now looking at the possibility of outsourcing processes that have not been outsourced before. The need to reduce costs, improve efficiency, and avoid investments in facilities, processes and systems has forced the, "art of the possible" discussions within the C-suite that culturally would not have taken place before. The processes under scrutiny are outside the normal SG&A processes and include some industry specific ones as well as those that touch revenue generation and product development. For example, Alsbridge is engaged in discussions with clients about outsourcing legal services, evaluating marketing and advertising expenses from an outsourcing lens, audit, and actuarial services to name just a few.

This desire to look at every cost within the enterprise drives the second reason we are seeing new market entry sole source projects. These are the unique situations in which a buyer's research shows there may only be one provider who has the capabilities needed by the buyer. What is not well known is that there is a third situation in which sole source makes sound business sense for both the buyer and provider. These are what we call "new market entry" sole source transactions. They are not common but happen more often than most in the industry realize - particularly today when windows of opportunity open quickly and speed is of the essence.

The Next Wave of Vendor Relationship Management

White Paper | Category:   Transition & Governance  IT Infrastructure & Applications  Finance & Accounting Services...

What is the next great strategic sourcing practice for sustaining cost reductions and driving an efficient, competitive business in an environment that is constantly and dramatically changing? The answer is in how companies are addressing vendor relationship management and creating incentives that better leverage the capabilities of their current providers.

Most mature outsourced companies have created a concentrated multi-provider base, often with a handful of large sourcing vendors playing a major role in supporting the organization. These efforts have shifted business critical processes and value chain activities to outsourcing providers, creating new major provider relationships that are vital to operational continuity. Accelerated software delivery life cycles, vastly more sophisticated infrastructure virtualization, rapid pace of process and technology convergence, and the need to work seamlessly with offshore vendors have made effective vendor relationship management more demanding and more critical than ever before.

These companies are developing a new set of vendor relationship management capabilities by creating vendor "tiering" structures - including processes, governance mechanisms, and systems to manage sourcing vendors on a day-to-day basis over the full relationship lifecycle.

This paper describes the new vendor relationship management and service management environments, the challenges of extracting increased value through vendor management, and the vendor relationship management best practices leading edge companies are already applying in order to deliver maximum value from their multi-sourcing provider base.

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