Brief

Rethinking Tech Outsourcing: Five Actions to Create Value

Despite predictions that outsourcing would decline, Bain’s research shows most companies still rely on it—and many plan to expand their use.

By Nigel Cornish, Danielle Burgs Escobar, and Leo Hirson

First published on Απριλίου 03, 2025
min read


Is tech outsourcing outdated? Hardly. Bain’s recent survey of 200 executives who manage technology within companies shows that it remains a cornerstone: 75% are still outsourcing, and 83% plan to maintain or expand it in the next 18 months. While some companies turn to outsourcing to bridge capability gaps or boost quality, more than half of the surveyed executives cited cost reduction and efficiency gains as top goals. Achieving these outcomes demands clear objectives and disciplined execution. Drawing from our client work, we’ve identified five critical actions for successful outsourcing. Identify competitive advantages. Start by pinpointing the crown jewels to keep in-house—the differentiated capabilities that underpin your business strategy. Determine which elements of technology must be world-class and where to prioritize cost efficiency. For example, UK business process provider Capita retains product engineering as a critical advantage, but even it outsources tech support to lower-cost partners. Competitive advantage varies by company, but it’s essential to identify, maintain, and develop these key capabilities. Design for long-term control. Know the limits of what you can manage, and retain the in-house expertise needed to manage service providers effectively. Define responsibilities clearly—your provider may own solution architecture, but it must align with your enterprise goals. Track performance using your metrics, not theirs, to stay in control. Maintain institutional knowledge to prevent vendor lock-in, and quickly resolve issues. For a large UK utility disaggregating a complex outsourcing deal, success came from bringing critical control functions, in particular service management, back in-house. Take a holistic approach to IT delivery. Rather than solving isolated problems, make sure you understand how outsourcing arrangements will be integrated into your organization and its processes. When a leading global insurance market decided to outsource some of its technology and transformation functions, it assessed sole-source, champion-challenger, and best-of-breed models across the breadth of capabilities in scope to determine which fit best with its strategic priorities. Be clear on what you are (and are not) buying. Business focus on cloud migration, data monetization, and AI’s potential has led many providers (especially hyperscalers) to frame their offerings in these terms. But it’s critical to clarify what’s actually being contracted: digital and data transformation or just infrastructure? After extensive discussions on cloud transformation and data strategy with a hyperscaler, the chief operating officer of a leading European bank realized the provider’s proposal was little more than cloud capacity and professional services, leaving all the delivery risk with the bank. Plan resources and implementation thoroughly. A strong strategy is only as good as its execution, and most value leakage happens at this stage. Start implementation planning early, allowing ample time for due diligence and negotiations. Build a capable team to manage the sourcing process and vendor oversight. If employees are affected, recognize that signing the deal is just the beginning. Plan for consultations, smooth transitions, and increased support during the initial phases. Clear communication and ongoing sentiment tracking across teams (both internally and with service providers) are vital. With cost pressures rising, strategic outsourcing can offer a path to sustained savings and superior service delivery. By following these five actions, companies can unlock greater value and ensure that their outsourcing partnerships drive lasting success.

Is tech outsourcing outdated? Hardly. Bain’s recent survey of 200 executives who manage technology within companies shows that it remains a cornerstone: 75% are still outsourcing, and 83% plan to maintain or expand it in the next 18 months.

While some companies turn to outsourcing to bridge capability gaps or boost quality, more than half of the surveyed executives cited cost reduction and efficiency gains as top goals. Achieving these outcomes demands clear objectives and disciplined execution. Drawing from our client work, we’ve identified five critical actions for successful outsourcing.

Identify competitive advantages. Start by pinpointing the crown jewels to keep in-house—the differentiated capabilities that underpin your business strategy. Determine which elements of technology must be world-class and where to prioritize cost efficiency. For example, UK business process provider Capita retains product engineering as a critical advantage, but even it outsources tech support to lower-cost partners. Competitive advantage varies by company, but it’s essential to identify, maintain, and develop these key capabilities.

Design for long-term control. Know the limits of what you can manage, and retain the in-house expertise needed to manage service providers effectively. Define responsibilities clearly—your provider may own solution architecture, but it must align with your enterprise goals. Track performance using your metrics, not theirs, to stay in control. Maintain institutional knowledge to prevent vendor lock-in, and quickly resolve issues. For a large UK utility disaggregating a complex outsourcing deal, success came from bringing critical control functions, in particular service management, back in-house.

Take a holistic approach to IT delivery. Rather than solving isolated problems, make sure you understand how outsourcing arrangements will be integrated into your organization and its processes. When a leading global insurance market decided to outsource some of its technology and transformation functions, it assessed sole-source, champion-challenger, and best-of-breed models across the breadth of capabilities in scope to determine which fit best with its strategic priorities.

Be clear on what you are (and are not) buying. Business focus on cloud migration, data monetization, and AI’s potential has led many providers (especially hyperscalers) to frame their offerings in these terms. But it’s critical to clarify what’s actually being contracted: digital and data transformation or just infrastructure? After extensive discussions on cloud transformation and data strategy with a hyperscaler, the chief operating officer of a leading European bank realized the provider’s proposal was little more than cloud capacity and professional services, leaving all the delivery risk with the bank.

Plan resources and implementation thoroughly. A strong strategy is only as good as its execution, and most value leakage happens at this stage. Start implementation planning early, allowing ample time for due diligence and negotiations. Build a capable team to manage the sourcing process and vendor oversight. If employees are affected, recognize that signing the deal is just the beginning. Plan for consultations, smooth transitions, and increased support during the initial phases. Clear communication and ongoing sentiment tracking across teams (both internally and with service providers) are vital.

With cost pressures rising, strategic outsourcing can offer a path to sustained savings and superior service delivery. By following these five actions, companies can unlock greater value and ensure that their outsourcing partnerships drive lasting success.