1. Assess > 2. Evaluate > 3. Contract > 4. Implement
Process Step 2:
Evaluate
Evaluate will provide processes and tools for an approach to decision-making around outsourcing.
In this Process Step you will learn:
- How to use the outcomes of Assess to support decision making
- A decision-making framework
- How to develop a compelling outsourcing investment case
- How to use a high-level vendor assessment to determine available capabilities for an activity
- Best practices and lessons learnt from other countries
This step, Evaluate, builds on the findings of Process Step, Assess. Once an improvement opportunity has been identified during the Assess Step, the evaluation process is conducted to review potential outsourcing partners and help you adopt a core versus non-core lens to integrate product types into one supply chain. The Evaluate Step will supply a decision-making process with four essential steps to follow. Through this Step, you can determine what vendor capability exists to meet the outsourcing need by collating vendor profiles and conducting a high-level side-by-side evaluation. Finally, evaluate guides the user through building the investment case to inform outsourcing and considering financial variables (costs, benefits, key performance indicators).
To complete the Evaluate Step you will need to work through:
Evaluate will help you:
- Decide on what functional area(s) — core versus non-core — are identified for outsourcing
- Determine what vendor capability exists to meet that functional need
- Build the investment case to inform outsourcing
- Consider integration of product types into one supply chain
During Evaluate you will undertake the following activities:
- Determine the stakeholders needed to initiate the investment case
- Build assumptions, financial variables (costs, benefits, key performance indicators)
- Form a cross-functional work team
- Collate vendor profiles by conducting high-level side-by-side evaluations
- Seek senior management sign-off
The Evaluate Step requires you to form a cross-functional team.
For this Process Step, you’ll need a cross-functional work team including procurement, finance and the relevant logistics head. The team will be led by the Director of the central medical store.
Key activities for the team include:
- Review results from in-country assessment – as is (revise Process Step 1: Assess)
- Review external benchmarks
- Develop an investment case and cost-benefit analysis for outsourcing
- High-level vendor review
The below team design is suggestive – other departments or skillsets may be involved as required.
Department or skillset
Required for evaluate
Typical role
Requisite responsibilities
Procurement
Yes
Chief Planning Officer
Determines vendor capability and shortlists vendor selection
Finance
Yes
Senior Finance Officer
Builds investment case and formulates cost-benefit analysis
Logistics agency
Yes
Director of the Central Medical Store
Signs off priority functions in vendor assessment matrix
Logistics: functional supply chain
Yes
Functional activity specialist
Assesses in-country results and external benchmarks/case studies
Policy and planning
No
Chief Planning Officer
N/A
Provincial logistics agency
No
Provincial health officer
N/A
Local logistics
No
District Health Officer
N/A
Enabler departments:
- Legal
- Human resources
- Technology
- Human resources
- Technology
- Legal counsel
- Human Resource Director
- IT Director
- Determines organisational impact of outsourcing project
- Provides input to technology requirements or vendor options
At the end of the Evaluate Step you will:
- Have communicated the investment case outcomes
- Achieved consensus to proceed and initiate an RFP to vendor candidates for outsourcing
- Initiated a transparent bidding process that shortlists well-profiled supplier in preparation for Process Step 3: Contract
- Have adhered to public procurement laws