Outsourcing Where to Start

Step 3 - Objectives & Criteria

Once you have a clear idea of what you want to do and know the key personnel, the next step is to set clear goals and the criteria by which success is to be measured.

Objectives

As mentioned in the previous step now that you have identified who you need to work on the process of outsourcing you now need to focus back on the objective of what you are looking to achieve.   The purpose of setting the objective is to

1. to focus on one critical aspect to be achieved from outsourcing and
2. to provide the potential provider of the service insight in to what you are trying to achieve. 

Without the objective being set properly both parties could and can misinterpret what is wanted and required. 

So what are the possible objectives that one should focus on?  If you look at the benefits of outsourcing it is a matter of selecting one of these as your primary reason for outsourcing.  Why only one and not two or three?  This will become the driver for the prospective provider in devising a solution it is not to say that you cannot have a secondary driver however at some point the primary driver is where you have to make the decision.

For example if your primary driver was cost savings and your secondary driver was increased expertises at some point the secondary driver will start to out strip the costs savings as the cost of expertises will start to grow depending on the need required.  Another example is lets say your driver is to allow focus on the core business then your overall position in terms of cost would be if it did not cost more than what the current costs as removed all the problems with managing, recruiting, running etc the process or function then you have achieved your objective provided the service level agreement as to responsibilities sets out what each party is responsible for. 

In some cases you can achieve both a primary and secondary driver this normally happens when the process or function is a real mess. There is an old saying that to outsource a mess means that you will be charged more than sorting out the mess then outsourcing it.  However, one has to consider if there are problems at the moment will the mess every get sorted out to allow it to be outsourced!  In our experience this happens rarely and the cost does not reduce.  You can though structure the deal with the outsourcer to clean up the mess then restructure the fee to reflect a more efficient service. 

Criteria

You'll have to wait until next month to understand the criteria that you should be using to assess the proposal when received back as well as what you need to include in the request for proposal to ensure that all parties are operating to the same criteria.

Next month we will cover we will cover criteria for selection and due diligence and what to look for once you have received the proposals back from providers.

If you would like more information on what to do at the start please contact us on 01793 554 204 or email marketing@charitybusiness.com.