Invoices from outsourcing providers tend to be long and complex, and often there may be only one or two individuals in an organization who understand the details. But that shouldn't stop you from conducting an outsourcing audit because there are many places for erroneous and unnecessary costs to hide, reports CIO's Stephanie Overby.

Five percent of the line items in an outsourcing invoice are likely to raise red flags, according to Adam Strichman, founder of the outsourcing consultancy Sanda Partners. Whether these are mischarges or unnecessary charges, they can be used to initiate discussions with providers about lowering the bill. However, you can expect your provider to be less-than-enthusiastic when you come calling.

"The providers can be defensive. Some are trying to protect their base charges and others didn't realize these billing issues had evolved over the past several years," said consultant Mark Ruckman. "But in the end the providers all come around."

Overby outlines nine invoice areas in which errors are not uncommon, including leased space, secret offshore personnel, temporary staff, hardware and software maintenance, and cost of living adjustments.

For more:
- see Stephanie Overby's article at CIO

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