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Outsourcing, is it for you?
As a rough guide:
- If you have not adopted a shared services model then the benefits from outsourcing are probably greater
- If you have adopted a shared service model then you will probably know more about what you have to outsource, will be more specific in your requirements, with the move to outsourcing being easier
Why outsource?
There are many factors in the current business environment that are making businesses turn their attention to outsourcing:
Choosing an outsourcer Remember this is a partnership you are getting into, not a business as usual vendor-customer relationship. The outsourcer will become an integral part of your business so be careful who you choose. Some things to look out for are:
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The Benefits
The benefits of outsourcing could fill pages, but in the end they all fall under six major headings. These are:
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How is it priced?
There are many options for pricing an outsourcing contract. These are some of them:
There is no right or wrong method of pricing. Each has its good and bad points and is relevant in a given set of circumstances. If asked to choose the most appropriate method BP Consulting would recommend the last two. They both encompass the partnership aspect of the outsourcing relationship. For outsourcing to work all parties must work together and have an incentive. |
The Contract
The contract can play a critical in the success of an outsourcing relationship. If the relationship really works then the contract will seldom, if ever, be referred too. But it does set the ground for everything that comes afterwards and facilitates the learning and bonding process between customer and outsourcer. Some things to consider are:
Negotiating the contract for an outsourcing relationship will not be quick, but it can tell you a lot about the parties involved and is a precursor for what may occur in the future. Remember, an outsourcing relationship is similar to a marriage - to make it work you need to work at it. Outsourcing works but it needs two to tango and will work at its best when all parties buy into it and work together. |
Conclusion
Whether outsourcing is for you depends on these main factors:
Whether outsourcing is for you depends on these main factors:
- Where is your organisation / shared service in its life cycle
- How efficient are your processes, what is the potential benefit
- Where is your business in its thinking
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