Transcript Document

OUTSOURCING
University of Portsmouth
Hot Topic Event
18 October 2006
David Hewitt
PSL Consulting Solutions Limited
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ABOUT PSL CONSULTING
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.
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ABOUT PSL CONSULTING
OUR 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
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Join all nine dots with four straight lines…
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The answer lies outside the box…
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OUTSOURCING
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Why do it?
The business model
The pros (and cons…)
Is there a role for Procurement?
Managing negotiations
Critical success factors
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WHY DO IT?
Cost
BAU
In-house process re-engineering
Outsource
Time
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OPTIONS
• 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
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THE BUSINESS MODEL
• We start with a doughnut:
• Then decide how we are going to
eat it…
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THE DOUGHNUT
CORE BUSINESS ACTIVITY
Admin support
ICT
Training
Finance
Manufacturing
HR
Procurement
Logistics & distribution
Professional support services
Property & facilities
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THE ‘HANDS-ON’ MODEL
The G-force case study…
Hand the work to your outsource
partner and under your design and
output control let them manage it for
you.
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THE ‘HANDS-OFF’ MODEL
The 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.
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PROs
• Full cost visibility
• Creates (opportunity for) higher-level
capacity in your business
• Horses for courses
• Leverage potential
• Raises profile of procurement
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CONs
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Loss of ‘total’ control
Potential HR/CSR exposures
Inflexible contract management
Long-term compatibility with partner
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A ROLE FOR PROCUREMENT?
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Market knowledge
Supplier management
Communications
Managing the negotiations
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MANAGING NEGOTIATIONS
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Management control
Change control
Service levels
KPIs
Quality
Billing
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Escalation process
Measurability
Customer interfaces
Open-book structure
Incentivisation terms
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CRITICAL SUCCESS FACTORS
• 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
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ANY QUESTIONS?
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