WHAT IS OUTSOURCING? Paying an external provider to assume the operation and day to day management of a business operation. It may be an entire function, or just part of a process.
TWO TYPES OF OUTSOURCING “TRADITIONAL” & “GREENFIELD”
TRADITIONAL OUTSOURCING This type is probably the most easily recognized Employees are no longer used to perform the tasks A contract is established with a service provider
GREENFIELD OUTSOURCING In greenfield outsourcing, the organization changes business processes and methodologies, or The organization assumes new responsibilities previously not managed internally
BENEFITS OF OUTSOURCING Renewed focus on core business Mitigation of risks by reliance on experts Maintain appropriate levels of customer service
BENEFITS OF OUTSOURCING Service improvements Technology infusion Cost reduction
BENEFITS OF OUTSOURCING Improved cost accounting Avoidance of capital investment Asset conversion
WHAT MIGHT YOU OUTSOURCE? You may want to outsource core functions such as HQS inspections, or Project Development
WHAT MIGHT YOU OUTSOURCE? You may outsource non-core functions of your organization such as Human Resources or IT.
FACTORS TO CONSIDER IF YOU SHOULD OUTSOURCE? Understand your employees knowledge, skills and abilities Review your budget What is the job market like?
HOW DO YOU IDENTIFY A FUNCTION TO BE OUTSOURCED? Are there chronic and/or systemic issues?
QUALITY What systems do you have in place to measure quality? Can you maintain quality with more regulations and less funding? How are your audit scores? (PHAS, SEMAP, Worker’s Comp, etc.)
HOW DO YOU IDENTIFY A FUNCTION TO BE OUTSOURCED? Perhaps the function will be expanding or diminishing Perhaps the function has become overly complicated
TRAINING COSTS Do you already pay for external trainers? Do you maintain a training department in- house? Vendors are responsible for their own training
VENDORS PAY FOR TRAINING Make sure you define the certifications you require. Stipulate such factors as the frequency or relevancy of training you expect of vendors Keeping their staff trained is to everyone’s advantage
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