Most organizations use outsourcing as a service delivery mechanism. In fact, many large organizations deliver more than half of their IT, HR, F&A, and Procurement services with external service providers. This model works well as long as the organization is proficient at governing those external relationships and integrating them with internal service delivery. Too often, the success or failure of an outsourcing relationship is determined by the skills and attributes of its governance team rather than consistently applied governance methods and tools. A core competency in outsourcing governance has become a necessity for organizations that do any significant amount of outsourcing.
Outsourcing Governance Assessment Service
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• An executive summary of the group's governance capability
• A high-level assessment of:
- The alignment of the group's charter with the deals intent
- Process capabilities highlighting strengths and weaknesses compared to best practices
- The roles and skills of team members
- The effectiveness and efficiency of enabling tools
• A list of prioritized recommendations, and associated benefits, with preliminary estimates of remediation costs
The scope and deliverables of each Extended Outsourcing Governance component will be tailored to your unique requirements.
The Outsourcing Governance Assessment offering provides a phased approach that assesses the Financial, Contract, Issues, Risk, Performance, and Relationship Management capabilities of a governance group managing ITO, BPO, and/or KPO agreements. This assessment is done at four levels to ensure proper alignment. They include:
This phase is designed to give companies a comprehensive and objective overview of their outsourcing governance capability and how it is performing relative to the company's expectations and requirements.
The Outsourcing Governance Assessment Report produces:
• Organization - Assesses the functions, objectives, and goals of the governance group in relation to key stakeholders
• Process - Reviews processes required to accomplish the group's goals and objectives
• Job/Performer - Understands the roles, responsibilities, skills, authority level and management
• Tool Enablement - Assesses the technology and tools used to enable the group
Potential Follow-On Engagements: Extended Outsourcing Governance
This phase is designed to leverage the foundation established by the Outsourcing Governance Assessment phase and focus on the areas of greatest need for improvement. The services may be customized to fit your needs, but representative components include the following:
Target audience
CXO, Outsourcing Program Manager, Procurement - IT and business executives and Senior Management who are responsible for developing the IT and business process sourcing strategy and implementing it across the enterprise. This assessment will allow them to assess and improve their overall governance capability to more effectively deliver on their sourcing strategies.
Our consultants have extensive practical expertise in all phases of the outsourcing life cycle and understand the implications on outsourcing governance. Additionally, this framework has been successfully used across all back office functions in design and assessments for many of the leading firms in the life science, manufacturing, consumer product, financial services, entertainment, and hospitality industries just to name a few.
Our outsourcing governance consultants review two dimensions of a client's current outsourcing governance mechanisms: the design, that is, the documented elements, and the execution, that is, how the plan is actually implemented.
Considerable cost, manpower and time is invested to enter an outsourcing agreement whether the outsourcing is complete or selective, tactical or strategic, off-shore or on-shore, IT or business process. In many cases, the overall return on this investment has been poor, resulting in cost overruns, quality problems and terminated contracts. A significant contributor to this failure is inadequate understanding of and lack of attention to outsourcing governance. One source states that not having a formal outsourcing governance program is one of the "top 10 major sins of outsourcing, destined to sideline success of these [outsourcing] initiatives."
Our experienced consultants have developed an effective, comprehensive approach to assessing governance related to outsourcing that will determine their current capability level and risks areas. Through our solution, clients can obtain an outsourcing governance baseline that will allow them to prioritize their efforts to produce the greatest benefit.
The phased process and key deliverables are outlined below:
Outsourcing Governance Assessment Objective
Outsourced Service Benchmarking
This component provides a mechanism to compare the cost and quality of the outsourced services consumed by your company with those of peer organizations. This provides hard data for understanding the value of the services being provided and the opportunities for cost improvement in your outsourcing arrangement.
Collaborative Alignment Services
This component provides a means to realign and improve the relationship with key outsourcing providers. The tendency is for the expectations and priorities of clients and their providers to diverge over time as business conditions change. This service realigns the relationship, expectations, and priorities to ensure maximum value is realized from the relationship.
Outsourcing Governance Implementation Services
This component is a vehicle for cost-effectively improving your company's outsourcing governance capabilities in a targeted and timely manner. This allows your staff to be focused on the tactical aspects of managing the outsourcing relationship to meet your business needs, yet also address shortcomings identified in the assessment. For example, documenting or improving the new business request, contract change, issue, or reporting management processes.
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Defining Balanced Outsourcing Strategy
Optimizing Offshore Leverage
Outsourcing and Offshore Leverage Management
RFP Development
Contract Negotiation Assistance
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