When a seemingly sweet deal turns sour, it's time to prepare an exit strategy. Here’s how to preserve essential business operations, your vendor relationship and your job.
Original article published on Outsource Magazine
Outsourcing decisions often come down to a relatively simple cost-driven Return on Investment (ROI) calculation: how much will the cost change in each scenario and how quickly can that investment be recovered?
On the surface, this purely economic approach seems appropriate enough. After all, economics are certainly important. But over-reliance on purely financial-driven outsourcing decisions is one of the biggest causes of the “strategy-to-execution gap,” namely the distance between a company’s business strategies and its ability to execute on them.
To fully understand this, it’s imperative to discern what is frequently overlooked by the ROI calculation most companies make...
...Read the full article at Outsource Magazine
The most successful IT outsourcing decisions create truly innovative execution strategies that deliver meaningful business results. The outsourcing decision, however, frequently comes down to a cost-driven ROI calculation: how much will all this innovation cost us, and how long will it take to recover those costs? This is the wrong mindset and often the primary reason why IT outsourcing is generally underperforming.
Surveys from various industries have shown dramatic failure rates as high at 70 percent. Complaints come from both the clients and the service providers they turn to for the outsourcing. In one survey, more than 50 percent of buyers reported lower-than-expected economic outcomes. But service providers also complained about economic outcomes; specifically, about significant margin compression between 5 and 50 percent.
Read the full story in Data Center Journal.
Capto CEO, Tracy Currie, was recently interviewed for Healthcare Finance Management Association's CFO Forum by Laura Ramos Hewer.
Given the many competing priorities in an organization, CFOs need to make sure they understand the "why" behind their IT investments. Read the HFMA CFO Forum article.