Strategic Outsourcing: A Structured Approach to Outsourcing Decisions and Initiatives

General Overview:

Outsourcing is growing at double-digit rates. Why? There is a convergence of a number of forces that have changed the business environment. These include competitive pressures of a global economy, fast changing technologies, niche competitors that can change the competitive landscape overnight, and institutional investors who demand a focused management that delivers bottom line results and shareholder value. Similarly, in the government and not-for-profit sectors there are more sophisticated, vocal constituencies demanding improved service for less taxes or dues.

Leader: Wendell Jones

Workshop Goals:

In this workshop, Dr. Jones will cover the issues to be addressed in an outsourcing initiative and discuss in detail the seven steps necessary to make a wise decision to outsource or not, negotiate a sound win-win contract, and establish and nourish a successful relationship. These issues include planning initiatives, exploring strategic implications, analyzing costs/performance, selecting providers, negotiating terms, transitioning resources, and managing relationships. This workshop combines interactive group discussions, lectures and exercises to ensure that the critical points are understood. You will have the opportunity to ask specific questions and discuss issues related to your own outsourcing initiatives. As a result of this workshop, you will be better able to:

• Select the best project team and outside advisors to evaluate outsourcing
• Plan/implement an outsourcing project
• Understand how outsourcing fits or does not fit with existing vision, strategies, core competencies, transformation tools, etc.
• Determine the total costs of the targeted areas for outsourcing
• Determine the real performance of the targeted areas for outsourcing
• Draft a request for proposal that will encourage provider proposals
• Select the most appropriate provider in specific circumstances
• Negotiate fair and reasonable terms for a positive relationship
• Draft a contract that covers the important issues
• Transition the factors of production to the provider quickly and effectively
• Monitor the provider's performance after the transition occurs
• Effectively manage the ongoing provider relationship

Intended Audience:

CEOs, COOs, CFOs, Managing Directors and other senior executives, who are considering an outsourcing strategy, and department managers and other staff who will be actively involved in analyzing and implementing outsourcing initiatives will find this seminar most valuable. The seminar is also interesting for outsourcing providers who want to learn more about how their potential customers think about outsourcing.

Outline/At a Glance:

Overview of Strategic Outsourcing

• Outsourcing reasons and benefits
• Strategic vs. tactical outsourcing
• Outsourcing trends
• Outsourcing methodology -- the 7 steps

Planning Initiatives

• Initiating the project and defining the scope
• Selecting outsourcing targets
• Getting management acceptance of the plan

Exploring Strategic Implications

• Impact of size and vertical integration
• The role of process structures
• Core competencies: determining; exploiting; examples
• Restructuring and transformation tools
• Alternatives to outsourcing
• Provider relationship and decision rights
• Contract length
• Testing the prospective outsourcing initiatives

Analyzing Costs & Performance

• Measuring existing and activity-based costs
• Measuring current performance levels
• Performance level comparisons and standards
• Risk analysis
• Asset identification and capital budgeting
• Pricing models and financial engineering

Selecting Providers

• Service providers and qualifications
• Evaluation criteria and making a decision
• Developing the request for proposal (RFP)
• Scope: service specifications
• Provider qualifications and selection
• Performance measures and tools
• Pricing and other terms and conditions
• Establishing relationship team
• Due diligence

Negotiating

• Preparing for negotiations
• Negotiation levels and contracts
• Scope of services and performance standards
• Pricing schedules and production factors
• Management and control
• Transition, billing, payment, and termination provisions

Transitioning

• The transition process and roles
• Communication issues, HR, and transition issues

Managing Relationships

• Oversight
• Performance monitoring and measurement

For more information on bringing this workshop to your organization, contact Dennis Crowley by phone at +1 781 641 5125, by fax at +1 781 648 1950, or by e-mail at sales@cutter.com.