The four steps for optimal outsourcing decision-making

In this section you will learn:

  • The four steps for optimal outsourcing decision-making

When working through the vendor selection and evaluation process it is possible to optimise the decision-making process by following four steps. Before moving onto each step you need to complete the previous one. The first step involves activities undertaken during Assess to identify the service gap(s) and functional areas for outsourcing. The second step uses good practice reviews and case studies from other countries in the specific functional areas that have been identified as gaps during Step 1 to determine what good benchmarks will be. The third step involves developing an investment case by doing a cost-benefit analysis, applying performance attributes and assessing risk. The fourth step involves listing all potential candidates side-by-side to develop a high-level vendor assessment matrix. Each step is explored in more detail on the following pages.

Step 1:

In-country supply chain assessment

Step 2:

External benchmarks good practice reviews

Step 3:

Investment case model

Step 4:

High-level vendor assessment matrix