Although there are many reasons that companies outsource, the trigger is often the realisation that a constant internal headache could potentially be dispensed with by seeking external expertise.
Key points:
- Most outsourced contracts have misaligned incentives (supplier not sufficiently incentivised to maximize customer’s profit)
- Outsourced contracts involve a lot more work and a higher level of skill than is typically anticipated (but it’s much easier to do it right first time than fix it up afterwards).
There are 5 keys to successful outsourcing:
- Know why you are outsourcing
- Don’t outsource the understanding and control of the process
- Select a supplier that can deliver
- Set up clear, tight controls and alignment through a detailed contract and
- Proactively manage the contract to ensure excellence in execution.
If you would like an electronic or paper copy of any of our newsletters please contact Catherine Bristow at catherine.bristow@pipint.com
