Transformational outsourcing has long been hailed as the next big step in the evolution of outsourcing and offshoring. But what exactly is it all about? Bigger and more integrated deals? New service and operating models? Deals with SLAs focused around business value rather than traditional metrics?

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Three European telecom operators at a recent conference talked about some of the benefits of outsourcing that are not always obvious. This includes drastically reducing the number of time and materials contractors as well as their IT costs. In addition, time-to-market has not suffered as a result of outsourcing & offshoring but actually has improved. And while the telecom operators have reduced costs, they have created scalability, meaning they are able to better adapt to demand variations.

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Over the last decade, a number of leading firms have attempted to take outsourcing and offshoring to a higher performance level. To this end, they have experimented in a number of areas including upgrading relationships with vendors, new service models, and different ways to structure O&O deals. I have often wondered how these programs have fared especially as the economic landscape has shifted in recent years. To get a better handle on this,  I queried a number of colleagues whose expertise covers a broad range of offshoring and outsourcing topics. While by no means a scientific survey, I think the information gathered is both interesting and useful. 

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We recently published piece in McKinsey on Business Technology around the business value of IT infrastructure, and we got back some very good feedback through our Facebook that I think offers some good perspectives on how practitioners are thinking about the role of IT in general and infrastructure specifically.

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