This paper discusses the holy grail of outsourcing - better service at a lower cost!
A lot of outsourcing deals go forward on the premise that the managed service provider is also the lower cost provider - i.e. the sooner they take over our operations the sooner we see an impact on our bottom line. This is great in theory but often not so great in practice.
This paper discusses the MSP cost model and places and methods one can use to optimize service delivery cost - to the advantage of both parties because what costs you may not necessarily add to the profits of the provider!
Good discussion.
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