STRATEGIC SOURCING
SUCCESSFUL PARTNERSHIPS FOR OUTCOMES-BASED PERFORMANCE
IT sourcing has a long track record for underperforming economically and operationally. Our experience finds the majority of outsourcing deals, even two years out, are considered a disappointment by both the buyer and seller – failing to deliver the economic benefits, innovation, operational outcomes, service provider margins, and trusted relationships that both sides need for a successful partnership. In other words, outsourcing is broken.
HIGH PERFORMANCE OUTSOURCING
Traditional outsourcing is still broken in many organizations and a high barrier to improved performance. Partnerships tend to be lopsided and focused on activities versus allowing the technical partner to bring new expertise to achieve the client’s desired outcomes.
Note these typical complaints from both sides:
Client complaints
Lack of innovation and capabilities
34% site lack of innovation or continuous service-level improvements
24% site inflexible engagement models limiting ability to respond to dynamic business changes
Lower than expected outcomes
53% site lower than expected cost savings
28% site insufficient technical skills & expertise
Service provider complaints
Clients not ready to operate
45% find client vendor management and process are too immature
32% are challenged by lack of client understanding of outcomes-based contracts
Focus is not clear
9% cite lower than expected cost savings for clients
A disproportionate focus on cost versus valuable outcomes
Our high-performance SYNAPTIC Sourcing framework empowers Capto to support clients in sourcing the right technology and services. In leveraging and commercializing the best academic research, coupled with our extensive experience dealing with real-world scenarios, Capto’s disciplined, comprehensive approach to sourcing spurs innovation and accelerates positive results.
The result:
Two years out
68% of outsourcing deals are seen as failures
by buyer AND service provider.
| Whitepaper |
RESTRUCTURE FOR COST TAKEOUT
Economic uncertainty has created the imperative in many enterprises to shed costs - quickly. IT and BPO service provider relationships represent an opportunity for meaningful savings. Tinkering around the edges by seeking pricing concessions from service providers to lower costs for existing services will prove only moderately successful over the near term and will ultimately result in declining provider performance in the long term.
More importantly, it is a missed opportunity to optimize and strengthen an established partnership.
In contrast, restructuring your service provider relationships provides an opportunity to address cost reduction priorities while simultaneously positioning your business to take advantage of opportunities for future growth and change.
The benefits of restructuring existing service provider agreements are threefold.
There is the possibility of immediate cost takeout.
Restructuring relationships can be done with the goal of increasing productivity, which will ultimately drive costs down over the medium to long term.
By creating more flexible and dynamic agreements, your enterprise will be better able to adapt to changing market conditions.
Opportunities for Immediate Cost Takeout
Reconstructing Your Service Provider Contract to Drive Greater Value
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OUR
PROPRIETARY METHODOLOGY
DELIVERS
Collaborative solutions to drive innovation in solution development
Adaptive deal structures driven from innovation during selection
Value and
incentive-driven partnerships
Templates and tools focusing on strategy, service delivery and economics
Ongoing
support post-transaction
Progressive, outcomes-based deals
CASE STUDY
SOURCING INSIGHTS
Read how Capto shifts the relationship between client and service provider to a true collaborative partnership, with shared goals for measurable outcomes.
