Outsourcing relationships can get strained over time as objectives deviate and technology leverage/ innovation falls behind the industry norms. There could also be sizeable total cost of ownership (TCO) bloat associated due to shadow costs, poor productivity commitments, skewed terms and conditions (T&Cs), and commonly, poor implementation of transformation levers compared with what had been initially promised. Unfortunately, these issues cannot be identified within a single price benchmarking exercise.
Everest Group’s strategic engagement review (SER) objectively analyzes key enterprise-provider contractual relationships and highlights tangible opportunities for both optimization and transformation. The framework covers five dimensions, which are assessed in detail – solution, contract T&Cs, delivery and performance, price, and transformation.
A strategic engagement review is an objective exercise serving as a base for mutual value creation in strategic contracts, as opposed to simple benchmarking initiatives. Most SER exercises eventually end up being self-funding with a return on investment (ROI) between 8X to 20X.