Five Mistakes in Outsourcing that Destroy Value

Jan 8th 2013 | Posted by Steve Coper

Sourcing can drive tremendous value for an organization but unfortunately far too often, sourcing strategies built with the wrong approach do not create value and often destroy it, leading to years of recovery. 

Here are five straightforward yet common mistakes in outsourcing that destroy value: 

  1. Not having a clear service strategy aligned to business outcomes
     
  2. Failure to engage in sufficient upfront planning and analysis resulting in a sourcing strategy that does not align to overall business strategy and complement the business its serving
     
  3. Too narrow of focus on cost reduction and short-term results vs. tangible opportunities to drive growth, innovation and operational effectiveness which can be achieved through the right outsourcing arrangement
     
  4. Deficient workload and transaction tracking resulting in inaccurate data in an outsourcing RFP, and simply a bad deal for both the client and service provider
     
  5. Underestimating the management effort and attention required to successfully develop and manage an outsourcing relationship to ensure it delivers on the intended business case

Further Reading: WGroup recently published a Strategy Brief titled “The Next Generation IT of Outsourcing.” Click here to download a complimentary copy.

 

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