For Sourcing & Vendor Management Professionals

This is an excerpt

Executive Summary

Companies have spent years expanding their use of applications development and maintenance services based on a time and materials (T&M) model. Today, many service buyers feel they have maxed out their gains from this approach, and from the labor arbitrage obtained via offshore providers. Clients may face diminishing returns due to increased provider costs, decreased productivity, or both. To achieve the next threshold of value, apps services buyers need to transform staff augmentation relationships into relationships based on outcomes defined in terms of price, deliverables, and service levels, what Forrester calls managed outcome relationships. Clients instead should aim to take advantage of their suppliers' technical prowess, processes, and tools to save money and achieve other, potentially more valuable benefits. The transition from T&M to an outcome-based model goes beyond a normal stage in application outsourcing and is fraught with challenges. This document lays out an approach for sourcing teams to capture these benefits while minimizing risk.

TABLE OF CONTENTS

• Buyers And Providers Both See Gains In Managed Outcome Engagements
• Keys To Success In Managing To Outcomes
• Transitioning An Existing Maintenance Or Development Relationship

RECOMMENDATIONS

• Be Patient In Transitioning To Managed Outcome Relationships
• Related Research Documents

This is an excerpt

Buy Risk-Free

Price: US $499

Our Service Guarantee: If you are not completely satisfied with this document, notify Forrester within 24 hours of purchase for a full refund.

Already a Forrester Client?
Log in to read this document.