Article at a glance:
Outsourcing deals have come a long way from the simple sourcing contracts that were once negotiated by the IT services department. Today's outsourcing agreements are huge, complex, and far more strategic in their goals—and in many ways, have come to resemble mergers, joint ventures, and divestitures in the way they shape what businesses are part of a company's portfolio.
The take-away
Executives today would do well to start giving their outsourcing agreements the same level of scrutiny and input as they give to M&A deals in general.
This article includes the following exhibits:
- Exhibit 1: ~50% of outsourcing deals fail to deliver expected value
- Exhibit 2: Value components for typical M&A deal—for buyers and sellers
- Exhibit 3: Safeguards for M&A outsourcing deals