Wave 5 of the technology revolution is upon us. (Preceded, of course, by mainframes, client/server, desktops and then the Internet.) Cloud computing is a key component of this new wave.
Contracts, of course, form the bedrock of beautiful outsourcing relationships. How do you contract for cloud services? Are cloud contracts different from contracting any IT service?
In his book “Cloud Sourcing the Corporation,” Ben Trowbridge outlines a list of concerns. He points out that many of the current cloud providers have business-to-consumer roots. “Their current contracting practices place much emphasis on the provider and not enough on the corporate customer,”… Read the rest
As the outsourcing service provider landscape continues to shift through mergers and acquisitions, how can buyers construct their contracts to protect what they envision in the relationship despite a change in provider ownership? I spoke with two attorneys, James Nelson and William Russell in the New York office of Venable LLP, who frequently counsel clients on mergers and acquisitions and outsourcing matters, and asked them about insights and best practices to protect the interests of buyers of outsourced services.
Q: Sometimes when a service provider is acquired, some of the service delivery nuances that were in place with the prior… Read the rest
I remember 2003 and 2004 because that’s when most companies I interviewed about outsourcing arrangements started talking in earnest about “taking a partnering approach” to get more value from outsourcing. Since 2006, many have talked about their successes in partnering. But here’s the reality; they were only partial successes.
Partnering helped them get through the transition phase easier and helped them try to resolve challenges in a win-win manner; but when the business situation changed and thus impacted the buyer’s savings or the service provider’s margins, most of them still hit a wall despite the partnering approach.
There were foundational
With outsourcing being used for ever-more complex services, there are more variations and risks that could impact intellectual property, particularly when outsourcing product development or research and development (R&D) functions. I spoke with two attorneys, James Nelson and William Russell in the New York office of Venable LLP, who frequently counsel clients on intellectual property and outsourcing matters and asked them to share some insights for buyers of outsourced services in these situations.
Q: There are so many companies that don’t use third-party consultants or attorneys anymore because they have experience in outsourcing and have a center of excellence or… Read the rest
I worked with a potential client whose five year infrastructure outsourcing contract was coming up for renewal in six months. They were struggling with whether to move ahead with pricing that their provider had offered them (with some negotiation, of course) or whether to step back and examine what the going market rate was for the services being provided. The big question was really this: “How do you know you are getting a competitive price?”
There are two ways to solve that: 1) Get a “competitive benchmark” for the specific services you are outsourcing, and/or 2) “Test the marketplace” with a… Read the rest
The provider’s sales team has gone, all site visits have been conducted, and the contract has been buttoned down. It has been a smooth transition; now it’s time to put offshore delivery and support to the test of meeting business demands. But, in the new outsourced environment, how do you know whether the objectives against which the provider’s teams are managed are favorable to your goals?
In outsourcing, the key raw materials are people and their abilities. Delivery teams are incentivized to control the cost of people through a series of measures. By understanding these measures, you can… Read the rest
News reports over the past two weeks highlight the movement of midsized Indian service providers, Firstsource Solutions, WNS Global Services, and Intelenet Global Services deeper into North America instead of Europe. Others are moving deeper into Latin America and China. China’s outsourcing providers are taking hold in North America. Over the years I’ve followed and written about outsourcing, I’ve pointed out that competition in the service provider landscape is good for the buyers.
But maybe not. Let’s look at the bigger picture.
When a competing provider enters a market, an incumbent provider’s customers are vulnerable. The “hunters” on the new… Read the rest
Kudos to Adrian Gonzales for his perceptive – and accurate – blog regarding gain-sharing!
Those who equate Vested Outsourcing as meaning the same thing as gain-sharing clearly haven’t read Vitasek’s book. (I have, and I’ve blogged about it before, here and here.)
And those who think gain-sharing “doesn’t work” are not correct. Here’s why.
While it’s true that some sourcing relationships with a gain-share component encounter problems, it’s usually because they didn’t structure the gain-share agreement correctly. I’ve talked with more 20 buyers of outsourcing services who, when they ran into… Read the rest
People often tout Pareto’s Principle – better known as the 80/20 Rule, meaning 20% of something is always responsible for 80% of the results. It’s like a thump to remind us to focus on the 20% that really matters. But what is that 20% when it comes to outsourcing and where in the outsourcing journey does the 20% occur?
What do you think? Before you answer, consider the following.
Every year, many Americans hike the Appalachian Trail, 2,000 miles through 14 states on the US East Coast, from Georgia in the South to Maine at the northern tip. The most… Read the rest
Like all journalists, my inbox fills daily with press releases. Here’s one that caught my eye this week and – believe it or not – it made me think about outsourcing.
Do you love gourmet, country style bacon? Do you love premium roast gourmet coffee? Do you love the semi-sweet, sensuously succulent flavor of maple? Then something tells me that you are going to absolutely love Boss Hog’s Maple Bacon Coffee!
The press release went on to describe the product in these terms: “taken us by surprise,” “totally blown our mind,” “actually a pleasure,” “top notch,” award… Read the rest
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