Global Services just ran a great article on 9 ways to find hidden savings in your outsourcing invoice that is quite useful if your organization has just begun its outsourcing journey. A good Supply Management Organization knows that invoices often represent a great cost reduction opportunity. But invoices from outsourcing providers have additional opportunities for savings above and beyond the norm. These additional savings opportunities include:
- secret offshore staff
you might outsource your support to an organization that, in turn, offshores the work; you could be paying 60K a year for a 30K resource; be sure to get lists of all resources assigned to your account and their associated rates to make sure you are being billed accordingly
- temporary labour
not only might the rates be higher than contracted rates, but the charges, even if the rate is correct, might be for work that is not chargeable — for example, a provider behind on a task might hire temporary labour to catch up, but if the task is a fixed-cost task, it should not be billed by the hour
is the organization (still) being billed for software that is not being used
- pass-through expenses
are all of the pass-through expenses valid? if approvals are required, were they pre-approved?
And these are just the tip of the iceberg. Be sure to check out 9 ways to find hidden savings in your outsourcing invoice for five more — because outsourcing only saves money if it costs less to outsource than to do it in house.