Most outsourcing companies leave money on the table. Research shows that most lose an average 9.2% of annual revenues by under-managing their contracts (source: IACMM).  The worst performers are oil, gas and utilities, which leave 14.5% on the table. The IACMM number for outsourcing is 4.8% but, from my experience, I reckon that the real number in the UK is closer to 7%. Even at c. 5% this is significantly more material for outsourcing because of the margin sensitivity of outsourcing contracts.

I can fix this. I put together a team of professionals with the relevant skillsets.  We apply deep sector experience, IP and proprietary process, performing contract reviews to identify the leakage, plugging the holes and then putting in place processes and systems to prevent recurrence. It typically provides a significant in-year ROI as well as long-term margin improvement.

1. I’ve done it before successfully.

2. Strong sector knowledge minimises false starts and faffing around with approaches that don’t make sense for the sector.

3. In-house background means that advice and work is grounded in the pragmatic.

Do Nothing. n/a

DIY. Hard to do on your own unless you have spare capacity and expertise.

Appoint other external counsel. It’s hard to find people that can provide this. It requires an unusual mix of skills.

Monthly fee plus a percentage of margin reclaimed.

Very high, and the margin reclaimed goes straight to bottom line. Plus (apart the monthly fee) you are paying on results (a percentage of the margin reclaimed).