Course Outline:
Strategic analysis. Conducting an assessment of goals and capabilities, analyzing different departments, services, and functions for potential outsourcing. Factors can include current and past performance, overhead, economic value of providing in-house service, and the degree to which the service is identified with the culture of the organization. This includes conducting an “inventory of all services currently being performed either by contract or in-house.    

Identification of candidates. Creating a list of potential outsourcing providers, including experience, financial stability, competency, and success in providing the required services.  In this phase the decision must be made to seek only domestic partners, or to source offshore.

Defining requirements in a Statement of Work and Request for Proposals (RFP). Typical to a standard evaluation process for any potential business partner, this will establish a formal format for response by potential providers. A potential provider will most likely need to conduct an onsite evaluation in order to prepare a meaningful proposal. During this time, the organization should be prepared to share specific data on an equal or consistent basis with potential providers.                                               

Selection of alliance partners. Based on the criteria outlined in the RFP, the organization narrows the list to a few potential providers and meets with each to clarify and discuss issues.

Contract negotiations/establishing performance expectations. This is one of the most important steps to a successful outsourcing relationship. The agreement must very clearly stipulate expectations, yet be flexible enough to allow for modifications. It should specify services provided and tangible measurements of productivity and quality.               

Transitioning operations. Assigning roles, responsibilities, timelines, and performance measures during the transition. Top executives should be highly visible and involved to ensure a smooth transition.                                                    

Managing the Relationship/Administering the Contract. Often overlooked as an important element, the outsourcing relationship and contract must contain processes and procedures for ongoing management by the organization. Establish monitoring schedules, a structure for identifying discussion issues, and conflict resolution measures.                          

Exit strategy. Covering the language and details for the termination of the relationship. This could occur if either party is unsatisfied with the arrangement, if there is a breach of contract, or if special situations arise. For example, what is the procedure if there is a change in the organization ownership or new regulatory measures that impact the outsourcing relationship?