Outsourcing is here to stay. Yet we are still making the same mistakes. Let’s dive into the retained organization. A vital and oft overlooked element.
By retaining a strong organization, the company can maintain control over its core strategic functions and decision-making processes. This ensures that the company’s long-term goals and vision are preserved, even when certain activities are outsourced. It allows the company to focus on its core competencies and maintain its competitive advantage.
A strong retained organization helps in managing the relationship with the outsourcing vendors effectively. It ensures that the company has the necessary expertise and resources to interact with and manage the vendors, negotiate contracts, monitor performance, and ensure that the outsourcing activities align with the company’s overall objectives.
Outsourcing certain elements of the business introduces risks such as loss of intellectual property, quality control issues, and dependency on external providers. A strong retained organization can actively manage these risks by establishing robust risk mitigation strategies, implementing quality assurance processes, and maintaining sufficient knowledge and expertise within the company to oversee the outsourced activities and thus be ready to retake it.
Outsourcing often involves coordinating activities between the retained organization and the external vendors. A strong retained organization ensures seamless integration between the outsourced functions and the company’s internal operations. It facilitates effective communication, coordination, and collaboration between different parts of the business, minimizing potential disruptions and achieving operational efficiency.
A strong retained organization allows the company to adapt and respond quickly to changing business needs and market conditions. It provides the agility to adjust the outsourcing strategy, switch vendors if needed, or bring back certain activities in-house if it proves to be more beneficial in the long term. This flexibility reduces dependency on external providers and enables the company to maintain agility and control over its operations.
Now doesn’t this all look a lot like contractmanagement ?
Author: Arjen van Berkum
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