Outsourcing (or subcontracting) is delegating non-core activities or internal production jobs to an external supplier who is specialised in those activities. Outsourcing is an economic decision that is frequently taken to carry out cost saving programs or to concentrate on the core activities. Offshore outsourcing (offshoring) also involves transmitting job to another country, either by engaging local subcontractors, or by setting up a production facility in a country where labour is cheap.

 

Challenge

As companies want to maintain or improve their competive position, they are often required to undertake cost saving programs or to concentrate on core business. In that case management tools such as outsourcing or subcontracting are strongly considered. In the early stage most of the suppliers were local companies, however since around ten years suppliers from low income countries have been present prominently. This shift of local to global delivery makes it harder for outsourcers to find the adequate supplier. How do we solve that?

 

Strategy… Implementation

Outsourcing can be classified in the following phases:

 

Strategy:

Before selecting potential service providers and sign contractual agreements,  we support to determine which skills are better carried out by third parties, deliver support in identifying company objectives and needs, assess the effectiveness of the current organisation, visualise the core competencies,  identify and assess possible risk of outsourcing.

 

Selection:

After the strategy, support is given in: determining the requirements, developing criteria, assessing the cultural `fit' with possible partners, setting up Requests for Information (RFI), Requests for Proposal (RFP) and evaluating tenders.

 

Contract:

After selection, support is given in: due diligence research of the selected service provider, SLA's organisational structure and processes for the management of the new contractual cooperation on topics such as rating, incentives and sanctions, termination clauses and requirements for benchmarking;

 

Governance:

As soon as the contract is signed, the customer is supported in: evaluating the most important elements in the cooperation, such as alignment and vision, contract and cooperation, price and service levels, and customer satisfaction, assessing the outsourcing performance and benchmarking the price and quality of the outsourcing services in comparison with other companies who have bought a similar service.

 

… Result

An Outsourcing project in association with Interim BizNet offers the following advantages :

• Cost savings are realised
• Organisation becomes more flexible
• Focus on core business
• Capital for innovation and investments is being freed
• Control in the hands of the outsourcer, implementation carried out by a specialised supplier 
• Efficient allocation for internal employees
• Access to more specialised expertise.

 

If you want to know more about Outsourcing services of interim BizNet, then you can contact us here.