The Process Of Outsourcing Part Iii

In drafting an RFP, companies should include information about the function to be delegated to the winning bidder

. As much as possible, the company should give out as many details as it could without having to enter into a non-disclosure agreement with each potential bidder. This is because bidders that do respond will be able to decide whether or not they'd be capable of providing the scale of services specified by the requesting firm, if it is clear on what it really wants to achieve.

RFPs typically request other information that can back up the bidder's capability to deliver the requested service. This information includes the most important information of all financial. Having access to financial make the company discerns and fish-out high-risk bidders that could affect the company's ability to continue as a going concern if a relationship is entered into with them. A company would not want to engage into a relationship with another company that is in danger of going into bankruptcy, because the former could incur operating losses from this kind of arrangement.

RFPs allow the company to look into a potential bidder's technological capability for the requested service. This is important if the company intends to enter into a foundry or third party manufacturing agreement. It would help the company decide whether or not the bidder has the necessary know-how and equipment to shoulder the company's production without negatively affecting it. Since it is the business that is at risk, a company should always ensure that not only can the bidder efficiently dish out products to the market; it should also help the company retain its customers. This is especially true for companies outsourcing customer service functions, since there are cases where customers have judged companies through their customer service capabilities.

To sum it all, a company should look into the balance of cost and the technological capacity of a potential bidder before it makes a decision to transfer part of its operations to an outsourcing company.

Supplier Competition

This is a lengthy process, and could take months and even up to a year of deliberations.

Supplier competition involves a stringent process of weeding out the worthy from the unworthy among the bidders. The company usually evaluates carefully all the proposals provided by the suppliers wishing to win the contract to shoulder the services for the company, and ranks them according to the degree of their qualification for the contract.

by: Lawrence Perry

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