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Depth and responsibility of outsourcing
Outsourcing can be done in different degrees of depth, resulting in different responsibilities that are handed over to the managed service provider.
The lightest form of outsourcing is providing assistance to the existing employees to improve the efficiency and effectiveness of the current process. The consultant acts as a coach, and there is no transfer of ownership, nor is the process executed by the external party. While this model has the least risk involved, it does not bring all value levers of the managed services model to life.
At the other end of the spectrum, you will find the full outsourcing model in which almost all responsibilities are handed over to the third party. The only responsibility that will remain at the company is the end-decision-making and reviewing the performance management of the outsourced process to ensure there is no conflict of interest. The risks are higher, but this can result in opportunities in commercial negotiations and has the potential to bring the most value to the company.
Most actual models are in between those two extremes. This is where the customization at the beginning of the relationship happens and where the strategic alignment needs to take place. It is important to create a RACI matrix (Responsible, Accountable, Consulted, Informed) at this stage to map out the different responsibilities for all key supply chain activities that have been selected. Typically the following activities are considered:
- Identify improvement opportunities and requirements
- Lead improvement design and implementation planning
- Support implementations of solutions along supply chain cycles
- Provide E2E coaching to external partners
- Support/Drive supply chain process execution
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