Strategic Outsourcing Plan and the Structure of Outsourcing Process

Abstract

Companies often treat outsourcing as de facto solution, without careful evaluation and understanding the true strategic rationals for pursuing it. Outsourcing brings in companies‘ business significant structural changes, which require a cohesive master plan, i.e. a strategic outsourcing plan. If a company starts outsourcing initiative, steps for success are: knowledge, planning, sourcing and execution. The success is primarily dependent on explicit planning and identification of all possible opportunities. Strategic outsourcing plan must be done from the perspective that it will help to grow business instead of focusing only on cost cutting, leaving out from consideration long term business implications. Company‘s business strategy should be aligned with outsourcing strategy and outsourcing strategy execution should stay in sync with near and long term business growth goals. The biggest mistake that companies are making when approaching an outsourcing solution is missing linkage to business strategy. Strategic Outsourcing Plan built without the context of business strategy can produce, at best, only tactical result and can take a company entirely to the wrong direction, allowing functions to be outsourced in ways that actually hurt the company. Before entering into an outsourcing engagement and before starting the plan, company should have certain processes to compare actual performance against plans. Concrete measurements, data history help to indicate processes weaknesses and opportunities for improvement, thus giving direct input to strategic outsourcing plan. Different duration business and outsourcing plans are defined as: long term, near term, short term and tactical. Each plan has its own business owners, activities to be performed, methods and tools to be used and documents created. Both strategic plans: business and outsourcing, should be performed in parallel in order to achieve maximum benefit.