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Balancing the Risk and Reward of Outsourcing

Category:   Strategy & Business Case  RFP Development  Provider Selection...

The best outsourcing agreement for your organization is not necessarily the one with the lowest price. Your primary goal when negotiating and structuring an outsourcing contract is to develop an agreement that achieves your business objectives not just on day one but throughout the entire term.

This white paper will help you understand the overall construct of a good outsourcing contract so that you can make certain you balance the overall risks and rewards in order to receive the services you need, at the levels you require, and within your price constraints.

Optimizing Value with Vendor Management

Category:   Transition & Governance  IT Infrastructure & Applications  Outsourcing...

Vendor management is the nerve center for optimizing the value exchange between you and your provider(s). While nearly all organizations involved in a sourcing relationship have initiatives underway to better leverage the capabilities of their providers through vendor management, most have vendor management structures are still in their infancy.

Alsbridge research reveals that the highest amount of value lost during the course of a sourcing relationship takes place as a result of poor vendor management. Conversely, the key to optimizing the value of a sourcing contract is through effective vendor management and the use of a well-planned and well-executed Vendor Management Office (VMO).

Through our years of experience and research Alsbridge has been able to identify some best practices among high-performing sourcing relationships. The combined research conducted by Alsbridge and MIT’s Sloan School of Management, demonstrate that companies with world-class VMOs have 20% higher margins than their competitors.

Looking beyond the financials, you will see these companies are doing things differently from their competitors. To cash in on your outsourcing relationships and follow the example set by these world-class vendor management offices, your organization will need to change individual roles, modify organizational structures, and change some of the companies’ cultural norms.

This means governing not just the provider, but bringing discipline inside the organization. This is a fundamental business change, and thus, a challenge that requires leadership from within the organization. This leadership comes from the top, but it is executed, implemented and brought to life by a high-performing VMO.

This research paper further discusses, defines and provides examples of best practices among successful VMOs to help transform your own vendor management office into a living breathing thing of beauty.

The A to Z of Outsourcing

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

Outsourcing has attracted a lot of attention over the past few years. At times, the logistics of outsourcing can seem complex but, the basic idea of outsourcing is of course very simple – reap the benefits of having a specialist do a specific job for less money than it would cost for you to do it yourself. However, when it comes time to setting up the right outsourcing agreement, you may be overwhelmed with the complex and bewildering array of outsourcing terms and jargon.

As a result, we at Alsbridge wrote this outsourcing guide to help anyone involved in outsourcing understand the main terminology. The "A to Z of Outsourcing" isn't intended to be an exhaustive manual, but rather it is a guide to help you understand common outsourcing terms and concepts. If you don't know your ARC's from your Earnback, this outsourcing overview is definitely for you.

We've tried to make this outsourcing guide comprehensive without creating an encyclopedia. However if there's anything you would like to know which isn't included, or which isn't clear, feel free to contact ALsbridge, we'd be delighted to hear from you. Our goal is to make understanding outsourcing as easy and simple as possible so you can gain the most benefit from your deals.

F&A Outsourcing Prices are Dropping. Are You Overpaying?

Category:   Benchmarking  Finance & Accounting Services  Outsourcing

Most companies that outsourced a portion of their finance and accounting (F&A) functions in the early to mid-2000s generated great savings at the time, but are now probably overpaying for the service levels they receive.

Now more than ever, sourcing buyers need to be prepared to aggressively renegotiate with their providers to increase service levels and decrease prices. Currently, market competition is driving F&A rates down even though the majority of local labor wages are increasing. The reasons for this are:

• Providers are decreasing profit margins to get deals and increase revenues
• Increased use of technology to automate processes results in greater efficiencies
• Increased use of benchmarking in BPO deals results in re-pricing of some
• higher-priced, out-of-market deals, thus driving down the market average

• Three reasons that market competition is driving F&A rates down (even though the majority of local labor wages are increasing)
• Three primary times you should conduct an F&A benchmark
•  Four fundamental components to consider when determining the value of renegotiating your F&A contract
• Seven elements an F&A benchmarking clause should include

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