Outsourcing Governance

Effectively Govern Outsourcing Relationships

“Effective outsourcing governance must be based on a mutually agreed decision making framework, guided by a clear strategy, executed through a simple structure, supported by processes, and managed in an environment of trust.”

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Outsourcing Relationships Issues
Despite an ever increasing number of IT processes being outsourced, many outsourcing agreements fail to realize their intended business value. Between 25% and 47% of all outsourcing contracts are terminated early, with nearly half of those actually bringing the work back in-house. About 17% of the outsourcing agreements actually end up in complete failure, some facing lawsuits and court proceedings. Outsourcing is a great sourcing option, but only when strategically aligned and well governed.

Outsourcing Relationships Insights
Why do so many outsourcing relationships fail? Superficially, the reasons for failure are poor vendor responsiveness, hidden vendor costs, insufficient planning, and lack of vendor management expertise. When examined more closely, most of the issues are truly related to absence of a sourcing strategy and ineffective governance and relationship management. Everest Group states that 70% of all outsourcing failures are due to buyers’ unclear expectations, interests that become misaligned over time, poor governance, and poor communication. In a Vantage Partners study, when asked what matter most in achieving outsourcing value, both clients and service providers answered “investment in working relationships” (over 70%). Only 33% of all outsourcing engagements actually make that investment.

Consulting Services:

Facilitate Development of Sourcing Strategy

An “actionable” sourcing strategy is key to implementing a successful outsourcing partnership and to managing the internal organizational change associated with outsourcing. Amazingly, Gartner reports that 65% of all companies lack a sourcing strategy! itValue Consulting helps our clients execute with vision by facilitating two interactive workshops joined by a data analysis phase. At the end of the workshops our clients will know:

Deliver Outsourcing Governance Initiation Workshop

After the “dating dance” of vendor selection and the antagonistic phase of negotiation, most companies rush to execute in order to accelerate the expected benefits. itValue Consulting helps our clients accelerate the implementation of an outsourcing governance, thus mitigating one of the main reasons for outsourcing failure: inadequate investment in governance and relationship management. After conducting the Outsourcing Governance Initiation Workshop our clients will have:

When Existing Relationships Begin to Deteriorate... Conduct Relationship Diagnostic and Facilitate an Outsourcing Governance Transformation Workshop

Many organizations have entered into outsourcing relationships too quickly and hoped that a thoroughly negotiated contract would translate into a successful outsourcing partnership. Over time, these relationships become dysfunctional and the intended business value begins to erode. Although it requires hard work, it’s not too late to turn these relationships from dysfunctional to a true outsourcing partnership. itValue Consulting can help the buyers or service providers better understand the situation by conducting a Relationship Diagnostic. We can then kick start the remediation process by facilitating an Outsourcing Governance Transformation Workshop. The topics and results of the workshop are similar to the Outsourcing Governance Initiation Workshop. However, the first full day is focused on mending the relationship and beginning to create trust.

Training and Speaking topics:

For the “do it yourself” types, itValue Consulting delivers public training or highly tailored on-site workshops to increase the skills our clients need to effectively govern their outsourcing relationships. We provide the following courses: Simplifying IT Governance to Maximize Business Value, and Transforming Outsourcing Relationships from Dysfunctional to Partnership.

Executive Coaching

itValue Consulting unleashes our clients’ leadership potential through executive coaching. Among many skills, we help them lead on purpose, accomplish goals, make sound decisions, exploit strengths, and manage organizational change. The coaching sessions may focus on how to apply the improved leadership behaviors to the outsourcing relationships.

Our differentiators:

Finding Common Ground. Experience bringing together people and organizations with varied perspectives, agendas, cultures, and diversity dimensions to achieve a common vision.

 

Accelerating Insight. Ability to quickly create the collaborative and creative environment that leads to profound insight.

 

Leading Virtual and Global Teams. Experience with practices, techniques, and tools for team members who collaborate on projects or on-going services from geographically diverse locations.

 

Sustaining Real Change. Expertise in creating real transformation by building the necessary people commitment and organizational readiness that enables change to stick.

 

Information Technology Expertise. Experience to not only help IT organizations and services providers, but also to leverage the technology that makes world wide collaboration possible.