Most organizations, understandably, develop tunnel vision at the beginning of their outsourcing journey when the prize is getting the right deal done. But what next? What happens when the ink is dry on the paper and clients can relax in the knowledge that they have negotiated a good value sustainable deal with a reliable supplier? The answer is – don’t relax. Translating that deal into successful day to day operational reality is vital from an organisational, and often personal, point of view. The current global economic downturn makes keeping transition costs to budget and realising the benefits of outsourcing even more important. And the cost of getting it wrong?
* Delayed transition to outsourced service
* Business case not achieved
* Increased cost and resource burden
* Poor client / supplier relationships
* End-users and stakeholders opposed to new ways of working
Experience shows that lack of strong and focused client-side transition management activity is a common contributing factor to deals which never got off the ground properly. Research shows that governance and relationship issues alone can account for a 40-50% value leakage on the average outsourcing contract (See Figure 1). Common symptoms are delayed transition, which erodes the business case, leads to messy and inconsistent communications and compromises ability to properly manage the people and processes involved in and impacted by the outsourcing initiative. Resources on both sides become stretched and liability for additional costs incurred tests relationships, often leading to a blame game. All of these things are real blocks to true realisation of both tangible and intangible benefits of the outsource engagement. You get one chance to lay the right foundations to prevent that value leakage from occurring – the transition phase.
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