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Outsourcing Fundamentals

Independent guide to Outsourcing: BPO strategy, Service Provider selection, contracting and implementation projects. Assessing and improving your current service.

Strategy > Introduction

Exploring Outsourcing Strategy

You may be considering a project to find a solution to a problem, or to test whether an idea has potential. A Sourcing Strategy project typically sets out to investigate and recommend how best to have a business process executed; where it would fit best in the business or the alternative of buying it in as a service. A narrower project might be focussed on testing whether outsourcing is the best way of achieving your business objectives. However broad or narrow your project, it is likely that influential stakeholders will be predisposed both towards and against outsourcing. A good strategy project will inform discussions and counter biases to recommend the best solution. While most of this site is focused on outsourcing, the strategy section is intended to consider all reasonable options.

When developing a strategy that contemplates outsourcing, these questions should be answered:

  • What are the business objectives and priorities to be satisfied?
  • What are the viable options?
  • Regarding the Scope of business area under review:
    • What is the size of activity in the current operation?
    • How many people and FTEs involved?
    • How many suppliers and customers to the process?
    • What does it cost?
    • How is it measured?
    • What is the current performance?
  • For the target future state what sort of service delivery model should be put in place? Which activities should be included? Where would the activity be executed and by whom?
  • What should the retained organization look like?
  • What are the major risks to execution and what should the change management approach be?
  • Does the solution have a viable business case and is there investment funding available?
  • Who are the stakeholders needed to approve the strategy and support a successful implementation?
  • How would the solution be implemented? In what timeframe and needing what resources?

The following pages consider these questions.

looking to the future