Outsourcing Cost Overruns
Definition
Outsourcing arrangements require ongoing assessments including contract reviews and performance comparisons to identify cost discrepancies. Failure to benchmark leads to duplicated efforts and uncompetitive pricing.
Key Findings
- Financial Impact: AUD 10-20% excess on contract TCO annually
- Frequency: Ongoing, contracts uncompetitive over 2-3 years
- Root Cause: No embedded governance for regular benchmarking and savings checks
Why This Matters
The Pitch: Outsourcing players in Australia waste 10-20% above market rates on unbenchmarked contracts. Automation of performance benchmarking and savings validation eliminates this overrun.
Affected Stakeholders
Procurement Managers, Finance Directors, Outsourcing Relationship Managers
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Benchmarking Process Inefficiencies
Suboptimal Provider Decisions
Excessive Change Consultation Costs
Unbilled Scope Changes
Fair Work Change Consultation Fines
Rework from Poor Change Adoption
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