Alsbridge Recommends Three Phases to Evaluate to Ensure Cost Savings from Outsourcing

Article in Outsourcing Leadership Provides Guidelines for Measuring and Maximizing Financial Benefits

Companies who outsource information technology, finance and accounting, or other business processes often perceive that the financial results of outsourcing fall far short of expectations. That’s the conclusion of a recent article published by Alsbridge, Inc. in Outsourcing Leadership, an online journal for outsourcing topics. The article, Changing the Approach to the Financial Measurement Process, goes on to describe three phases of the outsourcing lifecycle where cost savings and financial measures should be carefully evaluated so that “savings loss” can be avoided.

There are three distinct periods for financial measurement in the decision process to change any business model. They are:

Business case development

Contract negotiations and due diligence

Post-contract award (transition and steady state)

According to Alsbridge, savings loss appears in every phase, so each deserves its own evaluation process in providing assurance that the full value of the new delivery model achieves delivery and financial success. The methodology parallels the concept of continuous improvement and refinement, the same parameters that are required of the new provider.

“Studies have shown that from the business case to post-contract award phase, there is the potential for substantial savings loss during all of the phases, upward to 45% of the original anticipated amount,” said Ben Trowbridge, CEO of Alsbridge. “Evaluation becomes increasingly complex, moving through the phases of initial analysis to the new outsourcing model, with many variables to consider.”

Changing the Approach to the Financial Measurement Process, provides details on the financial indicators to measure (e.g. net present value, internal rate of return, etc.), and more than 20 specific areas to address in evaluating financial performance during each phase. The article is posted at http://www.outsourcingleadership.com/changing-approach-march31.shtml

Alsbridge recommends in-depth analysis of financial performance of outsourcing and provides unbiased consulting services to assist companies in maximizing the benefits while minimizing the risks of outsourcing. For more information on Alsbridge’s services, visit http://www.alsbridge.com/, or call (214) 696-6410. For the complete article Changing the Approach to the Financial Measurement Process, and for hundreds of archived articles and research papers, visit http://www.outsourcingleadership.com/.

About Outsourcing Leadership
Outsourcing Leadership is a leading online journal of original articles, research, insight, and opinion on topics related to outsourcing, shared services, and benchmarking. Sponsored by Alsbridge, Inc., Outsourcing Leadership has provided weekly news updates since 2005. The publication also hosts a monthly web seminar series and regularly makes research white papers available to qualified sourcing professionals through its web site http://www.outsourcingleadership.com/.

About Alsbridge, Inc.
Alsbridge, Inc. is an award-winning global advisory firm, providing unparalleled expertise in outsourcing, shared services, and benchmarking. The firm is fact-based and client-focused, with a proven methodology that fosters success. Alsbridge defines client goals and scope, finds the best cultural fit with providers, refines the best solutions and eases transitions and implementation. Founded in 2005, Alsbridge is the proven, effective difference. For more information, visit http://www.alsbridge.com/.