The Orbys Guide To Sourcing Management - Market Research Reports On Aarkstore Enterprise

Introduction

Introduction

A well-managed outsourcing arrangement can deliver sustained savings or added value of between 30% and 50%. But achieving this level of benefit requires not only a sound sourcing strategy and a comprehensive sourcing implementation approach but alsoand perhaps most importantlyan effective sourcing management framework in place throughout the life of the relationship.

Scope

*The aim of this report is to answer key questions about the final phase of the sourcing journeynamely ongoing sourcing management.

*This report provides best practice and ""lessons learnt"" for sourcing management, basid on experience from over 700 Orbys sourcing engagements.

Highlights

Industry leaders recognize that the short-term costs of implementing effective sourcing management structures are more than outweighed by the potential costs of termination and re-competition should these relationships fail.

Reasons to Purchase

*In Orbys' experience, a well-managed outsourcing arrangement can deliver sustained savings or added value of between 30% and 50%.

*A self-assessment scorecard is provided for an initial assessment of the effectiveness of your current sourcing management framework.

Table of Contents :

"OVERVIEW 2

Catalyst 2

Summary 2

Methodology 2

EXECUTIVE SUMMARY 3

Sourcing management starts with a strategy review 3

Understand the difference between a benchmark and a health check 3

Transformation of relationships is a specialist project 4

The importance of the retained organization 4

Table of Contents 5

Table of figures 5

Table of tables 5

INTRODUCTION 6

The benefits of sourcing management 6

Framework for effective sourcing management 7

SOURCING STRATEGY 9

Start with a sourcing strategy review 9

Recommendations arising from a sourcing strategy review 10

Reviewing the sourcing strategy regularly 10

Self-scoring assessment scorecard 11

The value of using a sourcing advisor to support sourcing management 12

DEAL PRINCIPLES 13

Revisiting deal principles regularly 13

SOURCING TRANSFORMATION 14

Drivers for sourcing transformation projects 14

Managing a sourcing transformation project 14

Case study: ITO sourcing transformation for major public sector organization delivers 2 billion in savings 14

Obtaining executive support 15

Structuring the requirements 15

Renegotiating existing contracts 16

Managing the department's implementation responsibilities 16

SERVICE MANAGEMENT 17

Improving current service management 17

Service management with multiple suppliers 17

Supporting service contract managers 17

PERFORMANCE MANAGEMENT 18

The need for active management of suppliers 18

Balanced scorecard for outsourcing performance 18

Regular performance review meetings 19

RELATIONSHIP MANAGEMENT 21

Improving relationships with suppliers 21

Dealing with a breakdown of relationship 22

BENCHMARKING AND HEALTH CHECKS 23

The difference between a benchmark and a health check 23

The limits of benchmarking as a negotiation tool 24

Approaching a benchmarking exercise correctly 25

Use benchmarking sparingly, with regular health checks 25

VALUE ASSESSMENT 26

The value of value assessments 26

Understanding the sources of value in existing relationships 26

Quantifying outsourcing value in cash terms 27

VALUE REALISATION 29

Driving suppliers to deliver additional value 29

Does value realization really work in practice? 29

INDIVIDUAL SUPPLIER STRATEGIES 31

A strategy for each supplier 31

Using developed supplier strategies 31

RETAINED ORGANIZATION 32

The importance of the retained organization 32

Keeping the RO up to scratch 33

RENEGOTIATION AND RE-COMPETITION 35

Regular renegotiation prevents deal drift 35

Planning a proper renegotiation 35

What happens if the supplier refuses to renegotiate? 37

TERMINATION AND EXIT 38

Considering contract termination 38

Questions to answer before planning a termination 38

IN SUMMARY: KEY FACTORS FOR SUCCESSFUL OUTSOURCING MANAGEMENT 40

Top tips for achieving maximum potential from existing sourcing arrangements 40

CASE STUDIES 42

Value assessment for existing ADAM relationships: global agrochemicals company 42

Pricing and contractual health check prior to contract extension: financial services group 43

Health check: pricing 43

Health check: contract 44

APPENDIX 45

Sourcing Management Scorecard 45

Orbys Consulting 47

Disclaimer 47

List of Tables

Table 1: Sourcing management effectiveness scale 45

Table 2: Sourcing management scorecard 46

List of Figures

Figure 1: Orbys sourcing management framework 7

Figure 2: Sourcing strategy: the overall approach 10

Figure 3: A balanced scorecard for outsourcing performance 19

Figure 4: Orbys relationship management model 21

Figure 5: Orbys approach to health checks and benchmarking 23

Figure 6: Typical output of an Orbys outsourcing value assessment 28

Figure 7: Value realization 30

Figure 8: Model RO 34

Figure 9: Phased approach to renegotiation and re-competition 36

For more information please visit :

http://www.aarkstore.com/reports/The-Orbys-Guide-to-Sourcing-Management-45159.html

by: Aarkstore Enterprise

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