Getting Value from Your Service Provider

Oct 15th 2012 | Posted by Steve Coper

Outsourcing Buying Behaviors Are Changing and IT Services Are Becoming More and More Commoditized—Are Service Providers in the Value Game?

Systems Integration, BPO and ITO providers are increasingly being asked to differentiate themselves through their solutions and their ability to commit to linking services to value creation. The alternative is to submit to the “low price” auction process for cookie-cutter solutions. The market is bifurcating into commoditized services that offer low value, contrasted with solutions that enhance shareholder value and allow service providers to achieve a level of intimacy with their customer, along with an acceptable level of risk and responsibility.

WGroup believes clients should make “fact based” selection of providers rather than an instinctual selection. Ensuring the integrity of the solution is paramount. Finding the appropriate market-pricing for the solution is somewhat less problematic. Cultural matches are important.

The logic for win-win transactions based on market pricing is obvious to us as a prerequisite for success. We do not consider sourcing deals to be procurement transactions and consider all of the dimensions of risk and relationship, including future investment impacts, skill requirements, technology upgrades and refreshes, as well as IT and business process re-design. WGroup works with clients to align sourcing strategy with where they envision their business in the future, rather than creating your “mess for less.”

Further Reading: WGroup recently published a Strategy Brief titled “Governance and Relationship Management.” Click here to download a complimentary copy.

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