To outsource part of your company’s activities, without too much risk, you will need to develop a good strategy. This takes time and thought. Below, I explain how to do it.

First of all, an outsourcing strategy is a plan that defines which activities a company will outsource and to which organization it will outsource them. It is part of the company’s overall strategy. This outsourcing strategy also determines the costs, the return on investment, the risks, the way to implement the project, etc. This plan also specifies how to communicate internally and externally about the changes that will take place in the company when the outsourcing is carried out.

What are the essential elements of an outsourcing strategy?

In an outsourcing strategy there are several essential elements that need to be carried out. One of the most important is the inventory of your company’s current situation. In concrete terms, it consists of analysing both the internal and external situation of the company. Internally, you can for example evaluate the level of expertise and performance of your IT department, count the number of servers, PCs, applications under management, licenses, etc. Profiling your employees is also necessary in order to have a global view of the skills you have internally. As for the external side, count the number of subcontractors, evaluate your relationship with them, determine their respective turnover, etc.

Next, think about the long-term vision that will shape the future of your company. It is important to know where you want to go in the next few years. Indeed, your outsourcing strategy should support your perception of the future of the organization, as well as the overall strategy of the company.

When these first steps are completed, define the scope of the activity you wish to outsource. This will help you choose the company to which you will entrust part of your business. To do this, ask yourself several questions, for example

• To what extent is it possible to outsource the activity? Are there sufficient skills on the market to carry out outsourcing?
• Is the business currently stable in-house? Or will you have to go through a stabilization stage before (fix and ship) or after (ship and fix) outsourcing?
• What optimisations can you expect in relation to what you want? (lower costs, higher quality, more flexibility…)
• What are the risks? For the project, for your company? Are there any legal constraints?

Finally, determine in advance how to implement your outsourcing strategy. Prioritize the sourcing initiatives you will launch. Design the plans for your new target organization. Identify all interactions between the stakeholders of the outsourced scope. Build and communicate a realistic storyline. And finally, prepare the eventual redeployment of people impacted by the outsourcing project.

Which people are going to carry the file in your company?

 The person responsible for developing the outsourcing strategy is generally the head of the department that initiates the outsourcing process. It is crucial that he or she has the support of the other members of the management committee. As the IT department is at the service of the entire company, it will be important to be able to count on this support during the difficult phases of the project.

To successfully complete an outsourcing project, it is important to surround yourself with a strong team to manage its implementation. The team will be multidisciplinary. Of course IT specialists, but also lawyers, buyers, operations, change management specialists, financial experts, a strong project manager, a relationship manager. It is also advisable to have a representative of the internal IT clients in order to be complete to start the adventure. It is finally the customer who will have the last word on the level of performance of the desired service.

Why is an outsourcing strategy cyclical?

The outsourcing strategy is constantly adapted and reviewed on a cyclical basis because it is part of the company’s overall strategy. This review is carried out according to market trends and the company’s strategic orientations. According to the evolution of these trends, you will have to adjust your outsourcing strategy. Concretely, this may involve improving your communication and business relationship with your partner, and better managing the implementation. It can also simply be a matter of reviewing the entire project to bring a breath of fresh air and modernity to your organization, after several years where a certain routine would have settled.

Your outsourcing strategy will change as your company’s maturity with respect to this business practice evolves. The more you know the ropes, and if the first experiences are conclusive, it is highly likely that you will proceed with extensions of the outsourced perimeter.

I will develop in a next post the four steps that make up a good sourcing strategy. We’ve only touched on them briefly so far. Do not hesitate to ask a question or give your point of view on the subject. I will be happy to answer you.