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Outsourced Portfolio Rationalization
Introduction
Large corporations have always been on the forefront of building on the scale or scope of outsourced work and adopting next generation outsourcing initiatives. These corporations continue to leverage new locations, extend functional scope, and test alternate sourcing models. Understandably, the outsourced portfolios that they manage become increasingly complex.
We have observed that complex portfolios may lead to redundancies, lack of checks and balances, and complicated sourcing governance, thereby significantly undermining the outsourcing benefits. Everest Group’s proprietary Outsourced Portfolio Rationalization methodology has been successful in resolving this problem at the grass root level thereby ensuring as high as 20% incremental gains from outsourcing.
This viewpoint highlights a real life client situation and describes how Outsourced Portfolio Rationalization helped unlock efficiencies in the sourcing arrangement.
RELATED RESEARCH
Managing Large Outsourcing Portfolios - Typical Issues and Implications of a Complex Portfolio
Large corporations run on a maturity curve where the basis of profitable
business is often governed by internal efficiencies. These corporations lead the
way in adopting new technologies and streamlining cost centers, yet they sustain
high levels of operations. As large buyers continue to leverage new locations, outsource larger functions,
and try newer sourcing models, one can expect their already bulky portfolios to
become increasingly complex. In our experience of working with Fortune 100 companies, we have observed that
the largest outsourcing mandates are often fraught with redundancies, lack of
checks and balances, and sub-optimal sourcing, all leading to a loss of precious
dollars.
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The Hidden Costs and Complexity of Managing Multiple ADM Suppliers
Everest's analysis of the cost and complexity of managing multiple ADM suppliers and how buyers can benefit from limiting the number of suppliers in their portfolio. |
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Managing Multiple Outsourcing Relationships
Companies are facing increasing complexity from managing multiple suppliers and outsourcing efforts. Learn how companies can deal with these complexities. |
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