Top 10 lessons from the outsourcing enterprise

1. Getting innovation and added business value from outsourcing requires pro-active business leadership, alignment of business and sourcing strategies, and organized, in-house core capabilities to be applied to the task.

2. Nine retained capabilities are required to provide leadership, governance and control, elicit and deliver on business requirements, retain control over technical direction and manage external supply. Under resource these capabilities at your peril.

3. Organizations need to develop long-term strategic focus by applying all nine capabilities rather than being drawn into firefighting and focusing only on the shorter term capabilities in the core capabilities framework.

4. High performers with distinctive skills, capabilities and orientations need to be developed or appointed. This should be embedded in HR policies. These performers need to be welded into a high-performance team.

5. Where implemented, core IS capabilities can experience high levels of success. However, a range of factors inhibit performance: weak governance mechanisms, inflexible outsourcing contracts and deals, under resourced organizations, insufficient supplier capabilities and sluggish supplier responsiveness to new demands.

6. Programme management and security are increasingly regarded as core retained IS capabilities.

7. In modern outsourcing, adaptive challenges far outweigh technical ones. Thus, leadership – the ability to shape the context for and mobilize adaptive work -- becomes critical.

8. Selecting and leveraging the right supplier is made possible by developing leadership capability for outsourcing. The leadership payoff is control, flexibility, governance, leveraging the relationship and innovation.

9. Look to be smart in your ignorance. Evolve capabilities and outsourcing incrementally at a pace of change and learning you can absorb. This means diagnosing where you are, and passing through up to three stages: Delivery, Reorientation and Reorganisation.

10. Manage beyond the quick fix. Having diagnosed your position, prioritise the development of retained core capabilities, use the external services market selectively and develop and apply creative and flexible business and IT leadership.