Showing posts with label Outsourcing. Show all posts
Showing posts with label Outsourcing. Show all posts

Tuesday, 4 January 2011

10 reasons why outsourcing so often disappoints the FS Industry

1.       Outsourcers don’t take enough time to understand the business outcomes that the client is looking to achieve
2.       Financial Services organisations underestimate the cultural transformation that outsourcing involves and rarely complete the transformation of the retained team.
3.       The measures on contract performance dashboards  contradict each other,  are over-complicated and are not aligned with delivering the desired business outcomes
4.       Financial Services organisations don’t take enough time to understand the outsourcer’s business and how and when they make money
5.       Most outsourcing advisors are just that, advisors, who have little or no practical, operational, hands-on experience of delivering outsourcing upon which to base their advice
6.       Financial Services organisations  engage contract negotiators who are rewarded for getting the cheapest (win-lose) deal not the optimal long term (win-win) deal for both parties, see outsourcing as a transaction and not a long-term relationship, have no incentive to keep the deal simple and have no long-term vested interest in the success of the deal
7.       Outsourcers have their sales team lead the deal, who are rewarded on the projected revenue and margin  of the deal with too little phasing  of commission based on performance of the contract. Delivery executives are, at best,  junior partners  in deal
8.       For outsourcing salesmen closing a deal is the only thing that counts (due to their competitive  nature and the make-up of their financial packages), leading to closing the deal being more important than the quality of the deal
9.       Outsourcers play ‘bait and switch’ – the best team are involved in selling the deal, but a less good team is left to deliver it
10.   Investment analysts continue to expect the very high margins  that early outsourcing deals had when the industry was in its infancy leading to unrealistic expectations being put on outsourcers driving scalping once the contract is signed