Outsourcing a business process requires careful planning and considerations. This report will cover the elements required to make sure the client’s and vendor’s business is protected developing a contract and formalising a relationship, requirements that need to included in a contract in order to achieve a successful business outcome, issues surrounding staff displacement,the effects it will have on the company and staff and how to deal with these issues.
To make sure the client and vendor’s businesses are protected during outsource contract negotiation, the client will need to discover and research what will need to be outsourced and the outcomes they wish to achieve from the agreement, the client will then need to write a reqeust for proposal which will allow the business to choose the best available vendor and also creates an opportunity for the vendors to showcase how they will achieve the requested business objective, The client will then select a vendor based on specified criteria, after a vendor is selected, the vendor should examine the client’s business environment. Now both parties will be ready for a contract negotiation, the client will need to create a contract that covers the intrests of both parties.
The report also informs of potential issues that may arise during the outsourcing of staff to the Vendor company. Staff displacement as it is known may cause emotional, financial, morale issues and also cause staff to be resistant to new methods. Further investigations through the use of case studies and articles revealed that there are severe consequences to these issues which include the delay of project, lack of quality in the final product, loss of revenue and possibly transferring staff refusing to leave and quitting. These problems caused could quite possibly lead to the demise of the outsourcing project and be a taint on the reputation of both Client and Vendor company. However the report does indicate methods to follow in order to prevent these potential hazards. The first is to have a strong strategic plan to inform, the second is to provide training to enable transferring staff to be ready for changes, the third is to provide strong leadership to have a someone for the transferring staff to turn to and lastly employing ‘Management Push’ which is an effective technique used to motivate staff when a new method or process is being implemented.
The report suggests that Client company must plan ahead before the outsourcing takes place to prevent any issues. The Client company must be prepared to employ all methods of resolving issues.
Table Of Contents
Contract development and formalising a relationship with a potential vendor 5
Requirements of the contract to achieve successful outcome for each party6
Ways to resolve issues10
Outsourcing a business process is seen by companies as a method of cutting costs, increase productivity and...