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Why Settle for Less? Deloitte Consulting 2008 Outsourcing Report


Deloitte Consulting LLP undertook a comprehensive research effort of more than 300 business and IT executives representing outsourcing buyers, outsourcing vendors, and legal firms. The purpose was to analyze the outsourcing approaches that companies are currently taking, and identify the leading practices, common pitfalls, and lessons learned from the outsourcing experience that could be applicable across all industries when undertaking an outsourcing program.

The survey has found that a large percentage of companies utilizing outsourcing reached their financial objectives and averaged an ROI of over 25 percent. However, a much larger than expected number of companies reported some level of company-outsourcer conflict, and many expressed disappointment with the outsourcers’ overall ability to provide continuous process and technology improvements.

Based on Deloitte Consulting LLP analysis of the survey, it appears that companies that implement outsourcing programs with proper financial analyses, methodologies, and governance strategies can overcome many of the shortcomings identified. This could add to the business benefit that many companies obtain from their outsourcing initiatives.

Five dimensions for an outsourcing program are outlined and are intended to aid those considering such a program in achieving full value from the effort:

Consulting 2008 Outsourcing Report (cover)

Rightsizing the Deal - Outsourcing the right things for the right reasons
Build a Solid Foundation - Defining and quantifying what is expected from outsourcing initiative
Vendor Selection Now Means Something Different - Choosing the right service provider
Striking the Deal - Ensuring that the contracting process is mutual and flexible
After the Deal is Signed - Getting what was paid for

Related Content:
Wall Street Journal "Business Technology" Blog Entry: Why Outsourcing Can Be Like a Strained Marriage
InformationWeek article: Study Finds Outsourcing Delivers ROI, But Not Innovation

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