Strategic Cost Reduction
Most organizations face questions regarding outsourcing from multiple sources. Executives want to know if sourcing will deliver results as expected. Business users threaten to outsource because it is cheaper than the in-house offering. Employees worry about their future careers and the uncertainty with outsourcing. Who doesn’t read a story about offshoring on a daily or weekly basis? What should I outsource, if anything? How much can I save? What is the scope? What services should be offshored? How can I realize the benefits of outsourcing? Is my organization ready for outsourcing? How do we do it so that our interests are protected? Will quality suffer? How do you manage these things?
A sourcing strategy assessment is a proven approach to answering these types of questions. First we help facilitate the objectives of sourcing. Why should you outsource or why shouldn’t you? What are the drivers? Secondly, we develop a base case of your current costs to understand the true cost of the existing services. We than analyze this data to see if there are potential opportunities for savings. The assessment considers several factors such as market conditions, skills availability, vendor capability, business drivers, savings potential, cultural factors, financial drivers, availability of metrics and data, etc.
If the assessment shows a potential for sourcing as a tool for meeting the objectives, we work with you to develop a sourcing strategy. What is the potential portfolio to analyze for sourcing potential? Which set of suppliers can best deliver the scope? What process should be used? What are the potential savings based on the potential scope of services? Where could the services be delivered from (on-shore, off-shore, best-shore)? What team should do the work? What is the best process to use? What data is required for the project? We then develop a plan to execute the strategy. All work created in this assessment will be instrumental if you decide to proceed to a sourcing evaluation process and eventually ousource services. Our goals are to dramatically improve the quality of management decisions and avoid costly mistakes.