Factors Behind the Cost of Outsourced Consultants

The cost of outsourced consultants is one of the most important aspects of an outsourcing deal. In the BPM industry, discussions about brokering an outsourcing agreement usually revolve around the costs involved. Setting up an IT outsourcing department in a company will sometimes necessitate the involvement of third-party consultants.

Assistance provided by such external agencies has to be monitored from the start itself in order to ensure that all parts of the deal are met and cost-effectiveness is maintained.

The cost of outsourced consultants is certainly not cheap. A large proportion of major outsourcing deals take place with the aid of external parties. This is done with a view to integrate current market pricing and intelligence.

In the BPM industry, a company that aims to set up an outsourcing department with the help of third-party consultants can go through with the process by making use of fewer consultants. This is possible if internal workers can dedicate themselves completely to this effort.
Time Magazine

Unbalanced focus on cost of outsourced consultants

The global recession led many companies to outsource at least a part of their operations. Many of the outsourcing agreements that were made with a view to bring down spiraling costs have caused various issues.

This is mainly due to the reason that these deals were not structured in a proper manner and many of the agreements do not meet business requirements. It has been estimated that 43% of the deals that have been brokered gave way to problems in the BPM industry, in addition to the high cost of outsourced consultants.

According to research conducted by the outsourcing consultancy firm Alsbridge among leaders from the BPM industry in Holland, Switzerland, Nordic countries and the UK, when the cost of outsourced consultants is focused on disproportionately, the resulting agreement is likely to contain many loopholes. This may result in the deal not meeting the intended needs of the operations that it was meant to, in the first place.

About 250 decision makers in the IT industry took part in this survey. Eighty four percent of these leaders had opted for outsourcing in order to reduce costs. However, data collected by Alsbridge showed that prices had fell by more than 25% since the majority of these agreements were signed.  The average decrease in prices was biggest for storage services, with a drop of 56%. While for telecoms, the decrease came to 43%, servers and mainframes witnessed drops of 23% and 20%, respectively.

This has led to a price dilemma in the BPM industry. Companies have to shell out more money than the average market price. Hence all these factors have to be taken into consideration before preparing an outsourcing deal.

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