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 Squeezing IT Infrastructure for Cost Savings: Is There More to Extract?
Category: Strategy & Business Case Negotiations / Renegotiations IT Infrastructure & Applications...
For the past 20 years or so, corporate management has looked to information technology (IT) services as a means to reduce overall annual costs. When all the internal cost reduction strategies had been squeezed dry, IT leaders turned to outsourcing to realize additional IT cost savings through leveraged service offerings, labor reductions via better tools and processes, and competition between the outsourcing service providers.
Once those IT cost savings were maximized, IT leaders went "offshore" to find even more IT cost reduction through labor arbitrage. Both offshore service providers and US-based service providers with offshore operations were able to offer IT cost savings over the onshore solutions due to lower labor costs of IT professionals located in parts of the world like India and Malaysia.
While there are some enterprise companies that have not fully leveraged outsourcing and/or offshoring to its full potential, most Fortune 500 companies have. These IT management teams have already been through several internal cycles of cost reduction strategies through layoffs, hardware/capital reductions, application rationalizations, consolidations, and more. And yet these companies are still seeking more opportunities to save IT costs in today's unsettled economic environment.
Due to the availability of better IT cost savings tools and the standardization of IT environments, IT leaders are beginning to examine the possibility of taking some services traditionally outsourced to a service provider out of their contracts and back in-house. This changing trend has clients asking outsourcing providers to further break down their pricing by the IT service towers to enable them to pick and choose what they want to have in-house and outsourced. This white paper will explain where you might be able to squeeze your infrastructure for more IT cost savings.
The Truth about the Three R’s of Outsourcing: Repatriate, Re-compete or Renegotiate?
Category: Negotiations / Renegotiations IT Infrastructure & Applications Outsourcing
In June 2011 I was interviewing the COO of a California-based bank as part of an application strategy engagement. At the end of the conversation, he asked if Alsbridge had any data on the number of contracts in which the client repatriated all of the services.
My answer was, "Off hand I don't know, but I will find out."
After asking several fellow consultants, I found little or no useful data that would provide a fact-based answer. So, I started digging.
The facts uncovered several "AH HA's!" about the keys to success in outsourcing and the truth about the three R's of outsourcing.
Beating the Benchmark Clause
Category: Benchmarking IT Infrastructure & Applications Finance & Accounting Services...
Benchmark clauses have long been included in outsourcing contracts as a way to ensure the agreement remains competitive over time. The clause, when written and executed properly, ensures that the vendor's services and price remain competitive over the term of the deal. This allows for clients and vendors to sign longer term contracts, thereby creating greater relationship stability for both the client and the vendor.
When structured properly, a third-party clause provides clients with a unilateral right to test the contract against the market to ensure that it is competitive. A third-party benchmark clause, whether executed or not, helps to ensure the agreement remains competitive over time.
So what should be contained in a benchmark clause? This research paper includes considerations for benchmark best practices that have stood the test of time and are critical to vendors and clients alike. These recommendations based on Alsbridge's extensive experience will ensure a benchmark clause provides the upmost value.
Shared Services: The Next Step
Category: Strategy & Business Case Transition & Governance IT Infrastructure & Applications...
Shared services organizations (SSOs) are measured based on the perceived or derived value from the output of their operations. SSOs believed to be on the forefront of providing maximum value to their customers exhibit many common characteristics during their evolution to maturity that others seeking to improve their current organizations can learn and use to their benefit.
This white paper will discuss the typical evolutionary path seen in these valuable organizations, review the techniques and best practices they are employing, describe some of the organizational models being used and offer tips for your SSO regardless of where it stands.
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