Right Sourcing The Challenge
There are a number of outsourcing models available to organisations seeking to reduce cost and / or
rationalise their business operation. These range from the more traditional IT and Business Process Outsourcing
(BPO) to Application Service Provision (ASP) and joint venture operations. The challenge however is to determine
which of these models best suits a given situation.
SECORs Integrated Sourcing Management Model (ISM) has been designed to assist organisations
in these decisions, ensuring appropriate consideration is given to all options thereby maximising benefits.
The Sourcing Options
Sourcing occurs whenever a host organisation seeks the services of a service provider to run activities or
handle business that it would otherwise have serviced itself.
In many cases the key driver behind this decision, without doubt, will have been cost. The second would probably
have been expertise, as organisations rationalise their operations and concentrate on what they do best, outsourcing
all that remains to organisations that can do it better and / or cheaper.
For a number of organisations, however, the option to outsource is as much emotional as it is financial. They
refuse to consider the outsourcing of what they believe to be their core value-add even if it is possible that
third-parties could do it better and cheaper. They fail to realise that:-
- Service differentiation can still be achieved through the accurate definition of the service
to be delivered by a third-party service provider.
- Continuous improvement can be facilitated through a partnership where risk and reward are
shared, as opposed to a straight SLA-based contract where performance and reward are pre-defined and static.
Some organisations for which regulated performance is key question how cost reduction through outsourcing can be
achieved without putting regulated performance targets at risk. Others are concerned about what happens if outsourcing
fails how do you bring the people and the expertise back in-house and at what cost?
To date the majority of organisations have only concentrated on the obvious, such as IT or back office business
process outsourcing (either on-shore or off-shore). Many organisations will consider the option of outsourcing a
system and its associated support activities. Overall, where cost reduction is an issue few organisations truly embrace
all the options that are open to them in a thorough and balanced manner.
The SECOR Sourcing Approach
The SECOR Integrated Sourcing Management Framework consists of the following layers. Each of these layers contains
the processes and techniques which make ISM a uniquely flexible and integrated framework.
The SECOR ISM model covers all forms of sourcing from relatively low value, simple transactional sourcing through
to high value, complex Business Process Outsourcing. SECOR can help clients to deploy a number of highly effective unique
techniques:
Project Oriented/Project Lifecycle SECOR has a project-oriented focus to sourcing and promotes the
use of a standard project lifecycle.
Sourcing Scenarios Early in the project SECOR will actively model the likely sourcing scenarios
(including the split between insource and outsource) using industry and market knowledge. This allows us to assist
organisations in selecting the preferred sourcing scenario.
Extended Engagement Over the last few years SECOR has noted that those sourcing projects, which
focus on an interactive and collaborative engagement with a smaller number of tenderers have had a far higher success rate.
Collaborative Definition This builds on the extended engagement model and allows customers to
collaborate with tenderers and jointly define the detail of the sourcing contract during the extended engagement process.
This mechanism delivers a more cost effective contract and avoids over-engineered service levels, prevents the missing of
scope/cost, ensures the inclusion of service improvements and facilitates the definition of shared risk/reward.
Outcome & Benefit Oriented All sourcing activity should be outcome oriented (i.e. it should be
productive and always have a useful outcome). The ultimate outcome should be to engineer into the sourcing contract a
series of benefits that will be realised through either transformation or continuous improvement.
Benefits
The following benefit areas can be realised from the SECOR ISM model:-
- Proven methodology, processes and track record of delivery by SECOR
- Ensures benefits are maximised
- Manages and minimises costs
- Expands opportunities for cost reduction
- Ensures service levels are retained
- Manages and minimises risks
Our Services
SECOR Consulting has a wealth of experience in the UK Water and Energy sectors and provides our clients with a range
of services to support their sourcing projects. In recent years, SECOR has carried out in excess of 25 sourcing consultancy
projects for Energy, Water and Telecommunications customers.
Services SECOR can offer include:
- Sourcing Strategy consultancy
- Procurement process management (Project Management Office, Engagement strategies, Procurement process management)
- Definition of Business requirements for procurement processes (e.g. Scope of Services definition, Qualitative
requirements for Tenders)
- Transition planning and management
In addition SECOR can also offer specific IT services e.g.:
- ICT Transformation planning
- Solution/Supplier selection reviews
Click here to view a Case Study on where
we have successfully delivered sourcing services.
Contact SECOR on +44 20 8942 0252, info@secorconsulting.com for more
information on our Integrated Sourcing Management Services.
|
