Alignment to business needs during the Request for Proposal (RFP) phase of any sourcing event is critical, but perhaps more so when it comes to capital building projects given some of the changes procurement professionals face within their stakeholder community. In most companies, the plant facility's engineering teams are composed of lifelong veterans within the industry who have executed numerous projects – some successful and others, well, not so much. This inconsistency of results tends to make these individuals rather risk adverse and fixed in a traditional way of thinking.
The managed services market has been an interesting one to watch from a consultant’s point of view. There was a heavy trend towards outsourcing many key areas within IT, only for the pendulum to begin swinging to the other end of the spectrum where clients are now pulling some (or all) of those same services back in-house. Nevertheless, your organization is likely to use some level of managed services within the IT organization given constraints on budget, resources or expertise.
Avery W. Katz, professor of law at Columbia Law School, tackles the conundrum of “incomplete” contracts. The challenge? How organizations can fashion a contract that is both economically flexible enough for a business relationship to move forward efficiently and legally secure enough to satisfy the parties’ legal departments.
Offshoring and outsourcing don’t exist in a vacuum. These are processes that take advantage of and are influenced by technology, politics and the larger economy. Look at the last big round of offshoring at the start of the century. It didn’t just “happen” without any reason. Very specific changes facilitated this age of outsourcing.
Ever since humans began using robots to tackle tasks, there have been naysayers predicting everything from all human jobs being written off by 2020, to complete world domination by a race of self-aware machine overlords.
Measuring the value of an outsourcing company for your own service requirements can be a surprisingly disorienting task to complete. But beyond its complexity, it also involves a lot of responsibility. Your decision is likely to affect your organisation’s strength and efficiency for the upcoming months, if not years. Making a good choice will mean the right level of support that will help your organisation grow. But selecting a wrong partner can be highly detrimental to the health of your business.
As regulations and consumer pressures shift and organisations are increasingly exposed to risk – reputational and beyond – the procurement industry faces a critical juncture. This dynamic has created a business environment where sustainable procurement programs are no longer just nice to have, but an integral organisational function that is responsible for protecting and improving brand reputation, driving revenue and mitigating business risk.
The formation of a good sourcing agreement relies on clear thinking and agreement between the parties on what is to be done, why and how. The market and technology are changing so rapidly that the next agreement is likely to bear little resemblance to the last. How to make sure we ask the right questions and not just the obvious of the suppliers and ourselves?
Your mess for less
In days of old, when suppliers were big, profitable and mostly American, the questions to be asked to define what a customer wanted of a new service addressed aspects such as:
Globalisation has sparked a shift in production to third parties. Savvy manufacturers are tapping digital networks to maximise opportunities and minimise risk.
Most companies recognise outsourcing as an attractive way to efficiently complete software development projects, especially for companies that are experiencing skills gaps, time gaps or budget gaps. When this happens, outsourcing can be a viable solution – but only if the company trusts the vendor to protect proprietary code, follow through on promises, be accountable, and deliver quality work on time. But trust isn’t the only consideration when it comes to outsourcing software development.