Alsbridge research indicates that between 40% and 70% of the expected value client organizations expect to realize over the life of an outsourcing relationship may be lost due to unsustainable contract terms and poor relationship management. What is more alarming is that the seeds of this “value leakage” are sown even before the contract is executed, many times during provider identification, evaluation and selection.

By using proven best practices and techniques in provider selection, organizations can significantly reduce the risk of value leakage and improve the probability that their sourcing relationships will be sustainable over time. Best practice suggests provider selection starts well before proposals are received and evaluated.

Given the importance of selecting the right provider to realizing the value in an outsourcing transaction’s business case, companies should assess whether their approach toward provider selection is aligned with industry best practices and whether the techniques used today minimize the risk of value leakage and maximize the probability of a sustainable sourcing relationship.