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ISG White Paper

Plugging the Value Leak: How to Improve the Governance of Outsourced IT Contracts While Reducing Cost

tina roy
by Tina Roy

Governance costs account for a considerable proportion of post-signature outsourcing spend. The role of the governance organization is to ensure effective collaboration between the customer and service provider(s); specifically, the interaction of IT supply with demand. This presents a significant challenge for client organizations, as approximately 30 processes can be identified within the area of contract governance services that are traditionally retained and managed by the client’s internal organization.

This ISG white paper examines the governance issues faced by all organizations that outsource IT services, and presents an alternative solution to retaining the governance of those contracts in-house. That alternative: Outsourcing the non-strategic processes to an independent third party. The financial and non-financial benefits associated with this approach, which many organizations are starting to recognize, are also considered.