Seven steps to outsourcing heaven

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Seven steps to outsourcing heaven

Karl Flinders

Warwick Business School has outlined major challenges for businesses if they are to get the best out of their outsourcing contracts.

Large businesses in Europe took part in the survey, commissioned by Indian offshore service provider Cognizant.

It found that less than half of all CIOs and CFOs (43%) have attempted to calculate the financial impact of outsourcing to their bottom line. Some 37% admit they do not try to measure the returns and 20% do not even know whether they have tried.

And of those that have tried to calculate the value of outsourced contracts less than 20% of CFOs and CIOs are very confident in the results.

The business school has set out seven steps for businesses to take to improve the performance of their outsourcing contracts:

- Figure out the context of the outsourcing activity

- Figure out the outsourcing strategy

- Figure out the benchmark

- Realise what is value over time

- Make your CIO a strategist

- Build the retained organisation

- Invest in outsourcing learning capabilities

"The business world is facing a new challenge: an outsourcing delivery system of high-value activities that demonstrates value over time and across business functions," said Dr. Julia Kotlarsky at the Warwick Business School.

In August research by Cognizant and the Warwick Business School revealed that businesses are throwing billions of pounds at IT outsourcing contracts despite having little understanding of what they spend or get for their money.

It found that only 8% of businesses knew how much money and time was spent on outsourcing contracts.


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