The Evaluation Process for Outsourcing
Outsourcing has progressed from involving only peripheral business activities towards encompassing more critical business activities that contribute to competitive advantage. One example of outsourcing can just involve the transfer of business support functions to external suppliers in order to obtain higher levels of performance at a lower cost with relatively little upheaval for the organisation. Another example is that outsourcing can lead to major organisational change that involves dismantling the traditional structure of the organisation, transferring staff to external suppliers, re‐defining staff terms and conditions, and altering the expectations of the employees that remain within the outsourcing organisation. Additionally many organisations have a mature portfolio of outsourced services and multiple vendors working together which requires significant management commercially, contractually and culturally. As a result, outsourcing has become an increasingly important and complex issue, and a detailed and structured approach to the evaluation of potential suppliers is a key component in getting it right. Where outsourcing is evaluated and managed appropriately, it can be a very powerful means of achieving performance improvements and contributing to the strategic development of an organisation. However, unless an ordered approach to evaluation is adopted, many pitfalls will be experienced and, ultimately, the failure of not achieving the right result. Quantum Plus’ clients benefit from our structured and proven approach to the whole evaluation process, from selecting the long/short list of potential suppliers through all subsequent phases of the outsourcing lifecycle to conclusion of a contract and transition to the new service model. It is important at each stage to use the increased understanding gained from the output of the evaluation to feedback to suppliers’ specific areas of interest or concern, thereby iteratively gaining an holistic and comprehensive appreciation of what the supplier will deliver, its capabilities and also areas for detailed consideration within the subsequent contract creation and negotiation. Although the evaluation process focuses on facts gathered throughout the various stages of the procurement process, including site and reference visits, it is important to also consider the cultural elements. This will ensure an organisation can answer the questions that may be more important to the long term success of the relationship, such as ‘Can we work with this supplier organisation?’ ‘Will there be sufficient cultural fit?’ The Quantum Plus evaluation methodology is tailored for each client, but has been proven to deliver the right result from small outsourcing deals to large strategic programmes for multinational organisations. Agreement by all stakeholders, and from the key decision makers, of the output of the evaluation at each stage ensures agreed milestones and a clear audit trail for the decision making process. This then provides an outcome that is comprehensive and detailed, and provides a firm basis for any final decision making process that is required within the organisation. Greg Rideout, Managing Director Quantum Plus For further information please visit www.quantumplus.co.uk or call 01789 201630
