70 likes | 85 Views
Outsourcing is a business practice used by companies to reduce costs or improve efficiency by shifting tasks, operations, jobs or processes to an external contracted third party for a significant period of time. Outsourcing normally frees up cash, personnel, facilities and time resources for a company.
E N D
Potentiam Published By https://potentiam.co.uk/outsourcing
There is a body of research that suggests many outsourcing deals are not delivering the benefits expected by client organisations.Common themes centre on a mixture of unexpected costs and issues surrounding the relationship. Yet despite these well publicised challenges there remains a significant client investment in outsourcing. In fact, the move towards outsourcing more core or strategic elements of the business coupled with the growing importance of greater collaboration with outsourcers is viewed as a way to achieve greater flexibility and agility. These challenges and developments suggest that outsourcing continues to be viewed overall as significant in the realisation of business goals and strategies although there are many who are currently in existing outsourcing arrangements that are failing to deliver the benefits expected.
It is our belief that outsourcing can be an effective strategy however there are a number of aspects that have to be understood and actively managed both from the outset and throughout the life of the contract to realise the expected benefit for the clients' business. The right blend of ingredients Having the right ingredients alone is not enough to form the basis of a successful recipe Any memorable gastronomic experience has behind it an exact blend of quality ingredients and other elements including skills, experience, preparation, timing, tools and monitoring to ensure the delivery of a successful outcome for the customer. At Aurora Partners we believe the same can be said of outsourcing.
The objective of this article is not to describe an end to end process for outsourcing; after all there are plenty of articles about that. It is looking to explore, from a client perspective, those aspects of the "outsourcing recipe" that we know from experience are often overlooked or undervalued and yet we believe are critical in terms of delivering the required value throughout the term of the contract. Looking at these aspects in more detail will help those involved in the procurement and management of outsourcing to better understand their existing outsource challenges and provide some insight into how to improve the successful prospects of future outsourcing ventures. Having said this is not an end to end guide to outsourcing it is important however to provide some context. The outsourcing process can be broken down into 3 key stages; Business Case Development, Tendering & Selection and Managing the Contract.
Creating the right conditions At the outset it is important to ensure the right "conditions" are created so it's worth recapping on a few basic outsourcing principles Understand what your organisation expects to achieve through outsourcing and what services it is planning to outsource: Cost saving is one driver for outsourcing but many organisations also outsource to obtain access to skills, drive innovation and to manage complexity/scalability more effectively Outsourcing is typically more attractive and less complex for routine/repeatable activities or commoditised services
Outsourcing those aspects of the business that are considered core, critical or strategic carries with it a high impact associated with any failure. This type of outsource requires a higher risk profile to be understood and managed and requires a more mature, collaborative based approach. Ensure that the business requirements, and how systems and capabilities can be leveraged, are clearly understood as this is essential to defining the service, the appropriate service levels, contract clauses and ultimately the price of the contract. Recognise that the business strategy and technological developments may change during the term of the contract and therefore there is a need to build in the appropriate level of flexibility and responsiveness into the contract to avoid excessive cost through subsequent changes.
Summary: Outsourcing is a business practice used by companies to reduce costs or improve efficiency by shifting tasks, operations, jobs or processes to an external contracted third party for a significant period of time. Outsourcing normally frees up cash, personnel, facilities and time resources for a company. Visit this site to learn more: https://potentiam.co.uk/outsourcing