Do you understand the real cost of outsourcing? How do outsourcing companies make it pay with only 8 to 10% margins on most core contracts? Simply put, they do it through commercially driven contract management - or the lack of it. The outsourcing market is booming, because suppliers apply professional contract management techniques which substantially improve their profitability.

All business change carries risk. Even in simple outsourcing initiatives, it is necessary to apply contract management skills and techniques to service level agreements, supplier selection, contract duration, resource assignment, prioritisation and problem management along with a host of other issues encompassed by the contract. Most companies have found that without proven contract management skills they are unable to manage the outsourcing process effectively.

One of our most recent high profile assignments was for British Gas.

Press Release - British Gas

Z/Yen played a major role in helping British Gas establish the outsourcing of their `legacy' Information Systems. Facing the challenges and the risks of outsourcing, British Gas IS Change Manager Kevin Connolly turned to Z/Yen for help. Kevin recognised that it was essential to have a `core of expertise' who were goal-orientated. Kevin Connolly explains "Z/Yen's lively and energetic style constantly challenged us to find positive solutions while providing the knowledge and experience to help guide the process. Their mission was to put in place the commercial management culture and make our Contract Management Group `fit for purpose'. Their consultants helped us to establish policies, controls and reports necessary to manage this complex contract. Their approach enabled me to prioritise our efforts effectively and to quickly interface with the members of the Hoskyns contract management team."

Recognising that outsourcing contracts are complex and dynamic, we have developed a framework for contract management called GUARDIAN, which provides our clients with professional contract management support in the evaluation, selection and execution of outsourcing contracts. Our approach to contract management focuses on the risks and rewards of outsourcing and is appropriate to all contracts irrespective of their value and complexity.

We are holding a number of management briefing seminars, and would welcome an opportunity to present our credentials to you. Please contact Stuart Otter, Director for Outsourcing Contract Management on (020) 7562-9562.