…yet, to date, organizations have received modest results from outsourcing initiatives…

Source: HfS Research and the London School of Economics Outsourcing Unit, 2011 Sample: 347 Buyers of Outsourcing Services

Governance exhibits rarely drive innovation….

Governance exhibits are often little more than management committees, escalation procedures, and meeting schedules.

4%

38%

23%

29%

7%

0%

10%

20%

30%

40%

Strongly Agree Agree Neutral Disagree StronglyDisagree

“My contracts’ governance exhibits are the lynchpin of the subset of governance processes that evolve services to match our strategic objectives.” (N=56)

…and contract incentives cannot drive innovation, either.

Contract incentives rarely sufficient to drive evolution or innovation: »Most focus on transaction efficiency goals »Few allow for automatic changes to increase established goals

6%

21%

25%

35%

13%

0%

10%

20%

30%

40%

Strongly Agree Agree Neutral Disagree StronglyDisagree

“My contracts’ economic incentives are sufficient to drive an evolution of services to match our strategic objectives.” (N=48)

Source: HfS Research, 2011

Buyers say they want innovation, but they really want to drive efficiency and cost reduction…

Source: HfS Research and the London School of Economics Outsourcing Unit, 2011 Sample: 347 Buyers of Outsourcing Services

Organizations need to establish an environment that promotes innovation.

Shift in Value Shift in Pricing Common, Open Business Plan

Willingness to Evaluate New Technology and Processes

Forum to Discuss Strategic Direction

Commitment to Making Decisions

Timing Dedication of Resources Willingness to Take Risks