‘Its not should you outsource’ but why haven’t you outsourced? – CPO’s must have an outsourcing strategy for their company – we provide some pointers to help you develop your outsourcing strategy.
Before outsourcing any part of their organization, companies should answer questions like the following as part of a rigorous evaluation:
- What are the goals we want to achieve from outsourcing?
- What are our core competencies and will the company lose competitive advantage if the service is outsourced?
- Which services or corporate support functions are not integral to or close to our core competencies?
- What is the current value contribution of the service to the firm and what is it costing to deliver that value?
- Can we fix ourselves internally before we consider outsourcing and what additional impact/cost could it have if world-class practices were achieved?
- In what areas could service providers provide these services at a lower cost while increasing the value contribution over time?
- What kind of relationship with a vendor is most appropriate?
- What are the risks of outsourcing, and how can they be mitigated?
- What is the cross-functional impact?
- How do we deal with the people and corporate culture issues?
Following a process as described below can help structure the outsourcing evaluation:
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