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Contracting-Out or Outsourcing In-House Functions – Doing It Right
June 13, 2012
By Michael VanBruaene, Big4.com Guest Blogger
Contracting-out or outsourcing in-house functions is many times viewed as a panacea to problems an organization is facing or as a sure way to reduce costs…. which is not always what happens.
Here are some considerations in planning to implement the contracting-out or outsourcing of an-house function and then their implementation. Use these guidelines as a starting point; the steps you end-up taking should be specific to the process at-hand and your particular circumstances.
- Document your objectives and list the reasons why you want to do it.
- Is it a strategic “asset” of the organization? This can affect what you specifically outsource and how you manage it.
- What are your expectations for the outsourcing?
- Document the process you want to outsource – in detail.
- Document your current costs, in detail. Will be needed when you receive bids.
- Document expected cost savings or improved effectiveness, if any. Quantify as much as possible.
- Determine the position (not person) in your organization responsible for contract / vendor management.
- Determine how to maintain adequate knowledge of the technical content of the outsourced processes.
- Determine the term of the outsourcing agreement.
- Consider talking in advance with a couple of vendors regarding your intention to outsource to gain relevant knowledge.
- Establish the criteria you will use to select the vendor.
After the contract is signed. After the contract is signed, the following should occur.
- Establish a project implementation office
- Develop an implementation and transition plan
- Develop a mutual understanding of organization cultures
- Establish formal points of contact between the organizations;
- Establish invoicing procedures and content
- Service review at regular points in time
For more detailed information on contracting-out/outsourcing click this link: http://www.advancingyourorganization.com/?p=1502. or contact me at firstname.lastname@example.org
Michael VanBruaene was a KPMG Director and blogs at www.AdvancingYourOrganization.com. Practical Tools To Improve Organization Performance