In this blog post, we’d like to share a recent article nicely put together by HfS research that highlights a striking fact: 83% of outsourcing customers would not go back, despite three-in-four failing to achieve value beyond cost.

There is good news – and challenging news – for outsourcing buyers, service providers and advisors: most enterprises are pleased they moved into an outsourcing model, but have recognized they need to make significant changes to the way they manage their service provider relationships, if they are to realize real value in the future.

Some service providers are going to become legacy, some will step up to meet the demands of the As-a-Service Economy, and there will be new arrivals in the future to disrupt the market, which may not even have been formed yet.

What is clear, is that two things are going to happen with most outsourcing relationships in the short-medium term: many existing service providers will be switched out, and contractual terms will need to change to reflect the evolving needs of the maturing enterprise buyer.

What this signifies, is that outsourcing is the start of a new way of working for enterprises, but does not provide all the answers in the early days – it sets the agenda for how they intend to operate in the future, where third-parties provide lower operational costs, increased scale and – hopefully – added capability. However, what is clear, in the initial phases of outsourcing, is that achieving lower cost and added scalability of resources are the real outcomes three quarters of service buyers actually expect:

Full article may be found here.