Transformational outsourcing is rapidly gaining traction among vendors and customers.
Simply put, transformational outsourcing involves rolling up IT outsourcing, consulting, business-process outsourcing and change management into a comprehensive package of services to help customers transform their businesses. Customers are naturally attracted to the underlying "value proposition," say industry observers, while partners like Accenture, EDS and IBM Global Services see it as a way to get the C-level executives attention.
Commodity outsourcing deals, by contrast, are generally not a priority consideration in the executive boardroom, says Mary Tolan, managing partner in charge of Accentures $2 billion outsourcing division. "Transformational outsourcing tends to be a CEO issue because it will have material impact on the share price," she says.
For instance, Accenture recently signed a deal with Janesbury, the U.K.s largest grocery chain, which calls for not only taking over the customers IT functions, but also for helping Janesbury improve its supply chain and in-store operations. A similar deal with Hydro 1, Canadas largest utility, requires Accenture to run five in-house business processes, including HR, finance, supply chain, customer care and IT. That frees up the customer to focus on its core business and thus should have a major impact on revenues and profits.