Predictive Outsourcing Success Scan

Companies turn to IT outsourcing to find greater efficiency, quality, and agility. They’re getting better at understanding the tradeoffs required by outsourcing, but in many cases, they’re still not seeing the benefits they expected.

Companies want access to lower-cost resources (near-shore or offshore), to upgrade service quality by leveraging vendor scale and experience, and to create agility through access to technology and specialist skills. But it can be challenging to control the total cost of ownership, to maintain internal capabilities and knowledge, to properly manage vendor performance and service quality, and to achieve faster time to market.

Five Root Causes of Value Leakage

After close evaluation of numerous outsourcing deals, BCG found that value leakage in the contracting phase, engagement model, and retained organization stems from five root causes:

  1. Lack of a systematic assessment of the implications of the contract, value drivers, and business case on different business scenarios
  2. Lack of transparency in the contract’s pricing structure
  3. Misaligned, immeasurable, and/or poorly tracked vendor-delivery team objectives or KPIs
  4. An overly ambitious outsourcing scope
  5. Inadequate contract management

BCG’s Predictive Outsourcing Success Scan (POSS) gives an initial assessment of a client’s IT outsourcing capabilities and supports hypothesis generation for root-cause analysis. This free five-question quiz can evaluate a sourcing set-up against key root causes.

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