While the typical benchmarking clause provides the opportunity to benchmark the services, many clients find third-party benchmarks to be expensive, disruptive and time-consuming. Results may just as likely confirm that a vendor’s price is market competitive, and no savings are to be had. Further, third-party benchmarks by their nature pit client against vendor – making them all but impossible to complete – and risk damaging what otherwise might be a good working relationship.
There is a better way. Clients looking to confirm market competitiveness are increasingly relying on screening benchmarks (often referred to as “pre-benchmarks” or screening benchmarks) that help… Read the rest
I recently decided to get a puppy, and a poodle seemed like a good, “normal” choice. But I wanted something “new,” not your standard, run-of-the-mill poodle. So I did an online search on hybrid mixes, and some of the names were so appealing! Boxerdoodle (Boxer/Poodle,) Cockapoo (Cocker Spaniel/Poodle,) Jack-A-Poo (Jack Russell Terrier/Poodle,) Labradoodle (Labrador Retriever/Poodle,) and Poogle (Beagle/Poodle,) to name just a few. But after researching some of the breeds, I realized there was not only the obvious poodle overlap but also some subtle differences among them, and I needed to consider all characteristics before selecting the best option for… Read the rest
Ask a handful of experts today, “What is Cloud Computing?” and you will likely elicit a wide and varied range of responses and definitions. For a provider, simplifying their explanation of cloud would cause them to lose a competitive advantage over others in the industry. Making a decision regarding the best option for cloud computing is a complex and perplexing decision due to a number of reasons.
Selecting a cloud computing provider can be a challenging adventure. You must decide why to engage your operations using this type of service, select the business processes and applications to be delivered in the… 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
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
Almost as fast as a wink – that’s how quickly word spreads on Twitter. And everyone’s doing it – you’d have to have been under a rock, so to speak, not to know of the tweets covering the Royal Wedding (2.7 million social media mentions) and of the even bigger stats on tweets about the death of Osama bin Laden.
But did you know that there’s a hedge fund now using tweets to predict market movement? Research by two universities says the emotions expressed about companies tracked through tweets will predict market movements up… 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
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
It’s a well-known fact that when the interests of parties in an outsourcing arrangement are not aligned – either because the original business assumptions changed over time or because they were never truly aligned in the first place – the deal is not mutually beneficial and one party won’t get the anticipated return on investment. However, most companies don’t understand how to structure and sustain a win-win deal.
Kate Vitasek’s book, Vested Outsourcing, describes the kind of relationship where all parties are truly vested in behaving in a manner that ensures they all look out for… Read the rest
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