PGS

Sourcing Strategy: What, how, and where to outsource?

The decision to outsource is only the first step towards outsourcing. Once that decision has been taken, it must be determined what and how this outsourcing should be structured. Many questions arise: What will be outsourced? Will the latest and challenging developments be outsourced and will your own staff continue to be involved on working on the old projects that will be phased out? How do you avoid to become forever bound to your temporary supplier? How do you protect your trade secrets, or are you willing to share them with your outsource partner or supplier? How do you protect your production, trade secrets, intellectual property and keep your knowledge within the company? Which tasks do you assign to your internal teams and which tasks would you give away? How to make sure that at the end of the journey you own all work, plans, documentation and manuals that were performed or produced on your behalf? Or does the supplier owns and keeps all the drawings, diagrams, plans, details, algorithms and secrets if ever the contract comes to an end? Or are you convinced that the delivery contract will never be terminated? How do you ensure that when you want to change supplier, stop the cooperation, insource your outsourced project,... that you are still in a position to do so? When you decide to insource your projects again, do you have all the necessary knowledge about the project to take over the project? And how much of your knowledge your supplier could share with his next client? What happens at the end of the project?

Which contract do you enter with the supplier or partner? You will be invoiced based upon the reported hours spent and costs made (Time and Material), or based upon accepted results? What if a problem suddenly arises after delivery of the project? You pay your supplier again to solve the problem?

These are just a few of the many questions that are answered at the start of an outsource project to determine a solid outsource strategy. Without a good outsource strategy, there is a good chance that you are committed to your supplier for a long time and that the supplier has you hooked. Changing supplier or ending the contract with your supplier then becomes a very expensive affair. Too often this gives rise to reverse engineering projects or executing a project from scratch.

However, this does not have to be the case at all. Outsourcing does not have to become a nightmare at all. A good strategy of what and how to outsource can prevent a lot of disasters and failures. PGS therefore offers strategic advice on the choices to be made at the start and during the entire oursource process up to and including guidance in writing a good RFP for projects with outsourcing where the customer is protected, his knowledge is secured, his staff remains motivated, and the woes or the expensive corrections afterwards are avoided.