This has been a hot topic this week with many postings on the subject, including the one at Consider the Source. For me, the report Restructuring Outsourcing Agreements: An Indication of Failure, or a Tool to Increase Value offers some interesting insights into this topic. While it is widely believed that companies restructure their outsourcing agreements to "save more money", the survey results showed that the reasons most often cited were:
- The contract was revised after having expired
- A change in business volume
- A change in service scope
- Issues with service pricing
Survey results - Click for larger image
This is consistent with the theme that outsourcing done well requires an ongoing, sustained focus that considers when outsourcing makes sense, executing sourcing transactions well and then properly managing the arrangements that you have put in place.