subject: The Process Of Outsourcing [print this page] From the moment the company decides to outsource until it decides to terminate the outsourcing contract, is guided by its own set of steps in its accomplishment.
There are nine steps involved in the process of outsourcing a company function to a third-party. The first is the decision by the company to transfer a function or two to an outsourcing company. After that, the company goes on a process trying to find a suitable third-party provider that will dedicate itself to the performance of the tasks to be outsourced. This usually accompanies a lengthy process, after which the company zeroes in on the ideal provider and enters into negotiations that will ultimately lead to the signing of the contract.
Cost savings should not be the only consideration to be taken into mind when you decide whether or not to subcontract functions to outside parties. There are some instances that outsourcing could be just as expensive as tackling the service internally, but can afford several advantages related to skills and expertise that are not otherwise found in using internal manpower.
The signing of the contract would then allow the outsourced company to start taking over the functions, and another process is then commenced where the company gradually integrates its business function to the outsourced firm.
Deciding to Outsource
The decision to resort to external providers for specific function is an executive decision. The company's board of directors is the only body within the company authorized to give the green light whether or not a third-party should be contracted to provide the services on behalf of the firm. This is because outsourcing includes giving the supplier ownership over some assets, which would be instrumental to the provision of the service or function.
In deciding whether or not to avail of outsourced services, the decision-making body should take a look on what the organization as a whole needs in keeping up with the company's strategic interests and goals both in the short-term and long-term. If by careful evaluation, the Board decides that there is a need to outsource some of its functions, the green light is then given to start looking for third-party providers to address that need.
Before making the decision to outsource, the board would need to tackle several critical issues. These issues include quantitative considerations, including expenditures. Analyses of expenditures would include weighing the costs that would be incurred if the company decides to provide the services by itself against the costs incurred, when the services is provided by a paid BPO company.
