The onshore ratio lever: the hidden costs of an otherwise flat world
The vendor concentration lever: a double edged sword
The country concentration lever: the single-destination trap
Conservative-progressive optimization of the delivery model levers
As risk mitigation and cost containment take a new dimension in today’s turbulent environment, organizations are rapidly assessing the status of their global outsourcing portfolio, and in many cases, finding creative ways to be as conservative as possible with regards to risk management, and as progressive as they can be in terms of cost containment.
Successful organizations have blended these two approaches, embracing a strategy that combines the best of both worlds, into what we have defined as the conservative-progressive approach to global outsourcing.
We have prepared a three-paper series that explains the building blocks of valuable strategies—those that, from our experience, have proven to deliver value beyond traditional trade-offs.
In the first paper of the series we presented the foundations of conservative-progressive outsourcing programs, which based on our experience, need to do the following:
a) Establish a select group of preferred vendors b) De-risk through geographic diversification c) Embrace managed services d) Create a standardized knowledge platform e) Establish a metrics-driven management program
Once the foundations of a global sourcing program have been established, the second set of levers that our client organizations adjust to hedge risks and drive costs down is to assess the attributes of the delivery model.
As the second part of the series, this paper’s focus is on identifying the value of the existing delivery model, and to highlight the benefits that different approaches may bring.
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