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Balancing the Risk and Reward of Outsourcing
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
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.
How to Communicate Change in the Sourcing Environment
Communication is a powerful tool, especially during a business change. In this interview with Elizabeth Gordon-Pugh, senior manager for Alsbridge, plc., she discusses how to communicate change during a sourcing initiative. Effective communication can mean the difference between a successful transition and positive perceptions of the organization, or a plethora of challenges which might include retention and motivation issues, sub-optimal knowledge transfer, bad press, damaged labor and community relations, or long term reputational harm to the organization and the key players involved.
So, why communicate? Gordon-Pugh uses her knowledge and expertise to answer this vital question and explain where your organization should start, what you should say to your stakeholders, when to communicate, how to communicate change, and how to avoid the common pitfalls of communication.
Shared Services: The Next Step
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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