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Making an Effective Transition to Outsourcing

Avoiding the "ditch"


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Our research shows that information technology (IT) outsourcing is here to stay. During times of economic prosperity, outsourcing can enable a company to focus on core competencies, improve processes, and increase flexibility. During an economic downturn, outsourcing can help a company reduce costs, generate cash flow, and/or shed low-value operations.

We believe that realizing the true value of an outsourcing engagement depends greatly on the client’s and the vendor’s ability to plan and execute effective outsourcing transitions. Because they can affect nearly every key aspect of the business, the transition needs to occur in a seamless, cost-effective, and transparent manner while maintaining business continuity and performance.

On the surface, avoiding the “ditch” appears to be simple. The widespread view is that following good project management methodologies while executing the transition and governance plans will likely contribute to an effective outcome/desired results. However, although effective transition management is indeed based on good project management principles, the reality is that outsourcing transitions are difficult to plan and execute even for an experienced vendor.

Transitions are complex, difficult events that can place great stress on an organization. There is no magic formula that can guarantee a successful transition, but following the principles described in this document can significantly increase the likelihood of an effective outcome.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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