How to succeed in outsourcing through strengthened governance*
Although the number of companies pursuing strategic outsourcing initiatives continues to rise, studies reveal that as many as half of these investments fail to return the benefits executives expect. Even a quick glance at the portfolio of risks that can derail an outsourcing initiative begins to provoke questions about how to manage outsourcing uncertainty — across political and country risk, contractual risk, operational risk, and cultural risk. Common reasons for outsourcing failures vary widely, but each can be traced back to a fundamental lapse in managerial oversight and control — in effect, to a failure in governance.
In this Whitepaper, we examine the most effective way to manage outsourcing risk - adoption of a rigorous approach to outsourcing governance, and to do so well before contracts are signed and authorization to begin services is conveyed to third-party providers. To be effective, a governance model needs to address governance at strategic, program, and operational levels. We know that one of the best ways of translating this governance model into performance requires creating a strategic steering committee and establishing centralized outsourcing governance offices, or “centers of excellence". This White paper outlines the steps for establishing these centers of excellence and how to improve the overall value of outsourcing initiatives.