http://www.sap.hp.com/public/ Reasons why Organisations Outsource Commercial Service cost reduction transfer of fixed costs to variable costs cost transparency quantifiable service improved service Resource access to a wider resource pool access to specific technical skills Strategic enabling management focus on core business and supporting step change Quality processes & procedures best of breed Technical provision of step change technical advancement
http://www.sap.hp.com/public/ Typical Concerns re. Outsourcing l ….It is expensive! l ….I will be locked in to a long term contract! l ….I will lose control of my affairs! l ….It is risky and can go horribly wrong! l ….My staff will all leave!
http://www.sap.hp.com/public/ Understand your Organisation Differentiating Expertise Support with strategic consultancies e.g. Board of Directors e.g. Project Managers OUTSOURCING MANAGERS Professional Expertise Support with specialist consultancies Generic Expertise Support with outsourcing e.g. Programmers Clerks The Value Individuals Add to the Company Increases
http://www.sap.hp.com/public/ A Sourcing Strategy Process Stage 1 - Initiation Stage 2 - Information Gathering Stage 3 - Capability & Criticality Review Stage 4 - Sourcing Options Stage 5 - Final Report and Strategy COSTS ORGANISATION BUSINESS DRIVERS Critical success factors PERFORMANCE MARKET
http://www.sap.hp.com/public/ Sole-source vs Competitive tender? l Unique Solution? l Established/trusted business partner? l Time of Essence? l Independent VFM check if sole-source adopted
http://www.sap.hp.com/public/ A WIN-WIN SITUATION IS IMPERATIVE!
http://www.sap.hp.com/public/ The Outsourcing KPIs
http://www.sap.hp.com/public/ Key Tasks l Transition l Measurement /Reporting l ‘Soft’ services l Timely meetings l Remedial plans l No second- guessing l Penalties - realism l Quick wins/big hitters l Plan changes l Check alignment l SLA trade-offs l Continuous improvement …Remember the contract and your business goals!!!
http://www.sap.hp.com/public/ Sourcing Relationships can be complex... Outsourcing Management Team Supplier End Users Business Management Executive Specialist Advisers CustomersMedia Supplier Service Integrator
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