Identifying Opportunities For Managed Applications Outsourcing Engagements

Many enterprises that are seeking greater value from their applications outsourcing relationships are contemplating transitioning their outsourcing relationships built on staff augmentation to the managed outcome model, often under some pressure. Managed outcome relationships are distinguished by their defined outcomes and tendency to be billed on a fixed-price basis. Because an all-encompassing "big bang" transition would pose significant risks, the transition to managed outcome is usually incremental in nature. But how should sourcing and vendor management professionals identify potential opportunities for this change? Managed outcome relationships are often built around work streams with relatively large size and potential scale. However, suitable opportunities may not be easy to identify, and in some cases, existing project team organizations and staffing models may pose a barrier to moving forward. This report focuses on the key metrics for choosing candidate projects for managed outcome relationships.