Procurement’s View of Outsourcing (Part 3)

See Part 1 and Part 2 in this series as well.

We have considered previously the role that procurement can play in outsourcing transactions and why it is sometimes difficult for the function to establish that role. One early contribution procurement can make is in the development or analysis of the business case for outsourcing.

A typical case might be an organisation that thinks it may not get enough use out of outsourcing, so the board asks that a range of opportunities be considered, with some sort of review and proposal to be approved. (I’ve had involvement in such a case as both a line CPO and as a consultant – and it can be a fairly vague “feeling” from top management that opportunities exist, or a clearer view of where outsourcing might add value).

The second case is where procurement are involved directly in an outsourcing decision, and have a chance to contribute to the development of the business case or the go/don’t go decision. In either case, there are a number of factors that should influence the decision in whichever direction.

The first group of factors are internally focused around the current situation in the organisation.

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