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Outsourcing iQ

What are the potential benefits and what are the risks?

There is a lot of passion associated with outsourcing! Some are passionately for it (the new business model of the virtual company) and some are passionately against it (exposure to risk and loss of key competencies).

The reality is that it is always a balance of risk and opportunity - and the balance depends on the particular activity under consideration. The case also depends on the benefits being pursued (costs and/or quality and/or change in mindset) and the competencies of the outsourcing organisation.

The Outsourcing iQ iPad app helps you or your business team decide whether to outsource a specific activity and to identify the associated risks. It provides a disciplined process that will assist managers to come to a shared conclusion.

It takes a business team through a comprehensive consideration of the cost, quality and behavioural case for outsourcing a particular activity and a examination of the risks - hopefully without the usual emotion. It can be applied to payroll, help desks, sales forces, catering staff, manufacturing, Board of Directors....

The issues it covers include:

The economic benefit

This includes a consideration of economies of scale, variability of demand and the longevity of the demand for this activity.

The quality benefit

This includes the access to skills, the competency and focus of potential suppliers and geographical coverage.

The behavioural benefit

This includes consideration of the need for business focus and changing the mindset of the business to this activity and changing the mindset of the function providing this activity.

The business risk

This includes consideration of the ability to reverse the outsourcing decision or change the supplier if things go wrong, and also whether the business has the competence to outsource. Does it understand the economics of this activity, can the requirements be specified easily and does the business have the outsourcing skills of contract negotiation and management, project management and employee management skills?

Click here for details of the Outsourcing iQ iPad app.

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