KPMG Sourcing Advisory 3Q12 Global Pulse Survey - KPMG Institutes

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3Q12 Global Pulse Survey | Trends Outsourcing Transition Trends and Challenges On an annual basis, KPMG examines the challenges that buyer organizations have with the transition process in outsourcing deals. Transition represents the start of outsourcing governance efforts, the time when the proverbial outsourcing “rubber meets the road” and outsourcing aspirations become reality—or not. The issue is that transition efforts are inherently difficult, and some amount of dissatisfaction and disappointment is inevitable. The challenge is to minimize problems and accelerate the transition effort as much as possible. The Pulse survey first polled service providers and KPMGI member firms’ advisors on the most common causes of transition failure (see Figure 22). “Failure” was defined as outsourcing objectives not being met as a result of transition. Figure 22 | Root Causes for Transition “Failure” • The most common reason cited for outsourcing transition failure by advisors and service providers was ineffective relationship and program governance during transition, selected by 59 percent of advisors and 70 percent of service providers. Ranked second by 56 percent of advisors was inadequate transition project planning and due diligence, which service providers ranked third. Service provider ranked lack of understanding of the deal and scope by transition teams and business units second, while advisors ranked the cause third. Up 28% Y/Y • Advisors that primarily support EMEA deals and clients were more likely to cite the cause as lack of understanding of the deal and its scope. 36 Shared Services and Outsourcing Advisory / KPMG Sourcing Advisory 3Q12 Global Pulse Survey / October 2012 © 2012 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
3Q12 Global Pulse Survey | Trends These findings illustrate that a variety of factors contribute to problematic outsourcing transition efforts and lead to outsourcing efforts commencing on the “wrong foot.” Digging deeper, KPMG assessed the aspects of transition that buyers most commonly ignore, which lead to the root-cause failures identified above (see Figure 23). There were some differences of opinion between advisors and service providers regarding which transition aspects were most frequently ignored. Figure 23 | Most Frequently Ignored Aspects of Transition by Buyers The top ignored aspect of transition, cited by 72 percent of advisors, was effectively managing the change. This was also the top choice among service providers, followed closely by adequately resourcing the transition project. Shared Services and Outsourcing Advisory / KPMG Sourcing Advisory 3Q12 Global Pulse Survey / October 2012 37 © 2012 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
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KPMG Sourcing Advisory 3Q12 Global Pulse Survey - KPMG Institutes

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