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Many attributes
affect a successful outsourcing
relationship. Price
dominates the
negations, but other factors drive the health of the buyer/provider
interaction
after the contract begins.
To
judge and then improve the health of outsourcing
engagements, Alsbridge developed the Market Reality Assessment (MRA) service and
supporting analytical
systems. Based on
the experience of
Alsbridge consultants over hundreds of negotiated and managed
outsourcing
engagements, the MRA establishes a benchmark for your unique situation. The MRA relies on a
desired “landing zone”
where most successful outsourcing relationships generally score. The
goal of
the MRA service is to move the various attributes of the relationship
closer to
the landing zone to improve the probability of overall success.
The
landing zone is the area in which the outsourcing
arrangement has the best chance of long-term success with value
creation for both
the customer and the provider.
Evaluate 150 Attributes for
Optimal Performance
The service evaluates an outsourcing agreement against ten
best practice categories and applies a rigorous, comparative assessment
on over
150 contract attributes. Each
attribute
is scored based on industry references and the Alsbridge MRA database. Weighted values in each
category vary based
on functional areas, allowing for differences between information
technology
and business process outsourcing.
Attributes that drive the success of engagements fall within
these categories:
1. Scope
2. Flexibility
3. Pricing
4. Service levels
5. Legal terms
6. Business terms
7. Transition
8. Termination clauses
9. Governance
10.
Relationship management
The
assessment aims to build the most appropriate agreement
between the buyer and seller resulting in a win-win, sustainable
relationship
that recognizes the power of aligned goals and incentives.
The MRA gives transparency for client executives to quickly
understand and focus upon key areas needing improvement. The assessment
helps
customers at any stage of the outsourcing process—pre-close,
mid-term or
renegotiation phase—and aids both sides in communicating more
effectively.
For
companies already in the outsourcing cycle whose
contract may be up for renegotiation, the MRA improves the process by
showing
the company where to focus negotiations. Most contracts fall short of a
buyer’s
expectations because they do not include the attributes which this tool
measures. The MRA has been useful to buyers considering outsourcing
because it
gives them access to trends proven successful over time.
For more information about the Market Reality Assessment and how it can
help your sourcing engagement please call Alsbridge at 214-696-6410.
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