© PSL Consulting Solutions Limited OUTSOURCING University of Portsmouth Hot Topic Event 18 October...
-
Upload
ira-griffith -
Category
Documents
-
view
214 -
download
0
Transcript of © PSL Consulting Solutions Limited OUTSOURCING University of Portsmouth Hot Topic Event 18 October...
© PSL Consulting Solutions Limited
OUTSOURCINGOUTSOURCING
University of Portsmouth Hot Topic Event18 October 2006
David Hewitt PSL Consulting Solutions Limited
© PSL Consulting Solutions Limited
ABOUT PSL ABOUT PSL CONSULTINGCONSULTING Experts in procurement we provide strategic, operational and category-related solutions and services to the purchasing and supply community in both private and public-sector organisations throughout the UK and elsewhere.
© PSL Consulting Solutions Limited
ABOUT PSL ABOUT PSL CONSULTINGCONSULTINGOUR SERVICES & SOLUTIONS INCLUDE:
• Health checks designed to unlock improvements in strategy or operations
• Category sourcing support for discrete projects or a broad strategic analysis
• Better buying - an added-value package for profit improvement
• Our active consultant model that builds effective relationships with internal customers
www.pslconsulting.co.uk
© PSL Consulting Solutions Limited
Join all nine dots with four straight lines…
© PSL Consulting Solutions Limited
2
13
4
The answer lies outside the box…
© PSL Consulting Solutions Limited
OUTSOURCINGOUTSOURCING
• Why do it?• The business model• The pros (and cons…)• Is there a role for Procurement?• Managing negotiations• Critical success factors
© PSL Consulting Solutions Limited
Cost
Time
BAUBAU
In-house process re-engineeringIn-house process re-engineering
OutsourceOutsource
WHY DO IT?WHY DO IT?
© PSL Consulting Solutions Limited
OPTIONSOPTIONS
• Spin-off in-house team or process to new stand alone business
• Spin-off to existing business• Spin-off into a joint venture• Manage back-office services via an
external consortium• Eliminate in-house team &
vendorise
© PSL Consulting Solutions Limited
THE BUSINESS MODELTHE BUSINESS MODEL
• We start with a doughnut:
• Then decide how we are going to eat it…
© PSL Consulting Solutions Limited
THE DOUGHNUTTHE DOUGHNUTCORE BUSINESS ACTIVITYAdmin support
Property & facilities
Manufacturing
Finance
Procurement
HR
Logistics & distribution
ICTTraining
Professional support services
© PSL Consulting Solutions Limited
THE ‘HANDS-THE ‘HANDS-ONON’ ’ MODELMODELThe G-force case study…
Hand the work to your outsource partner and under your design and output control let them manage it for you.
© PSL Consulting Solutions Limited
THE ‘HANDS-THE ‘HANDS-OFFOFF’ ’ MODELMODELThe R-wave case study…
The black-box approach. Let the outsource partner ‘bite off’ a bit of the business and get on with it for you.
© PSL Consulting Solutions Limited
PROsPROs
• Full cost visibility• Creates (opportunity for) higher-
level capacity in your business• Horses for courses• Leverage potential• Raises profile of procurement
© PSL Consulting Solutions Limited
CONsCONs
• Loss of ‘total’ control• Potential HR/CSR exposures• Inflexible contract management• Long-term compatibility with
partner
© PSL Consulting Solutions Limited
A ROLE FOR A ROLE FOR PROCUREMENT?PROCUREMENT?• Market knowledge• Supplier management• Communications• Managing the negotiations
© PSL Consulting Solutions Limited
MANAGING NEGOTIATIONSMANAGING NEGOTIATIONS
• Escalation process• Measurability• Customer interfaces• Open-book structure• Incentivisation
terms
• Management control• Change control• Service levels • KPIs• Quality• Billing
© PSL Consulting Solutions Limited
CRITICAL SUCCESS CRITICAL SUCCESS FACTORSFACTORS• Get the right contract• Understand all the costs• Don’t outsource skills that give
you competitive edge• Only outsource leveragable
activities• Enhance your procurement skills
© PSL Consulting Solutions Limited
ANY QUESTIONS?ANY QUESTIONS?