© PSL Consulting Solutions Limited OUTSOURCING University of Portsmouth Hot Topic Event 18 October 2006 David Hewitt PSL Consulting Solutions Limited.

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Presentation transcript:

© PSL Consulting Solutions Limited OUTSOURCING University of Portsmouth Hot Topic Event 18 October 2006 David Hewitt PSL Consulting Solutions Limited

© PSL Consulting Solutions Limited 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.

© PSL Consulting Solutions Limited 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

© PSL Consulting Solutions Limited Join all nine dots with four straight lines…

© PSL Consulting Solutions Limited The answer lies outside the box…

© PSL Consulting Solutions Limited OUTSOURCING Why do it? The business model The pros (and cons…) Is there a role for Procurement? Managing negotiations Critical success factors

© PSL Consulting Solutions Limited Cost Time BAU In-house process re-engineering Outsource WHY DO IT?

© PSL Consulting Solutions Limited 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

© PSL Consulting Solutions Limited THE BUSINESS MODEL We start with a doughnut: Then decide how we are going to eat it…

© PSL Consulting Solutions Limited THE DOUGHNUT CORE BUSINESS ACTIVITY Admin support Property & facilities Manufacturing Finance Procurement HR Logistics & distribution ICT Training Professional support services

© PSL Consulting Solutions Limited 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.

© PSL Consulting Solutions Limited 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.

© PSL Consulting Solutions Limited PROs Full cost visibility Creates (opportunity for) higher-level capacity in your business Horses for courses Leverage potential Raises profile of procurement

© PSL Consulting Solutions Limited CONs Loss of ‘total’ control Potential HR/CSR exposures Inflexible contract management Long-term compatibility with partner

© PSL Consulting Solutions Limited A ROLE FOR PROCUREMENT? Market knowledge Supplier management Communications Managing the negotiations

© PSL Consulting Solutions Limited MANAGING NEGOTIATIONS Escalation process Measurability Customer interfaces Open-book structure Incentivisation terms Management control Change control Service levels KPIs Quality Billing

© PSL Consulting Solutions Limited 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

© PSL Consulting Solutions Limited ANY QUESTIONS?

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