Features: January 11th, 2013

As public sector organisations get into further rounds of budget cuts, outsourcing options are being examined more closely. In this feature Andy Vaughan offers some straightforward advice to get the best result.

Outsourcing back office services like cleaning, security and catering services can improve an organisation’s cash position and bring greater operational control and staff flexibility into the bargain. So why are some organisations reluctant to make the change and is there a fool proof way to get started?

Know what you want

Before you consider outsourcing anything, you must be clear about what you expect the service to deliver. The promise of reduced costs is bound to be tantalising, but take time to prepare a clear brief and make sure this is communicated verbally and in writing to the prospective service providers. A key part of any brief is to know what success will look like. For example, success may be a catering service provider who works seamlessly with the company’s facilities management team and can deliver a better range of healthy or locally-sourced food choices at a reduced cost. If so, stipulate this as a key requirement of the contract at the outset.

Research to find the best ‘fit’

Do your homework and make sure you identify the right team of people and the right contractor profile to complement your organisation. They should be able to demonstrate a sound understanding of your business and be able to design a service to meet your needs. They should also come with a track record of success and be reassuring to deal with, this is important in building trust. Taking the time to find the right service provider and meet the people who will be responsible for delivering the service is vital and will pay dividends in the long run and increase your organisation’s chances of procuring a long-lasting supply partnership.

Plan for changeover day

Once established, too many outsourced services either fail to deliver the expected benefits or get off to a bad start due to unexpected teething problems. One way to avoid this is to plan the changeover to the new service carefully and use scenario planning to ensure all eventualities are considered. Strong leadership from a project manager, provided by the service provider, will also help to ensure that changeover day is handled well and the new service meets everyone’s expectations. Regular meetings and forums will ensure that the outsourced service continues to deliver and that any issues can be addressed as and when they arise.

Don’t overburden the new service

Don’t make the new service a victim of its own success by over-burdening it in the first few days. For example, it is common for organisations to start curtailing non-essential spending as soon as they hear that services in a particular area are going to be outsourced. However, this can lead to pent up demand and place the new service under significant operational pressure when it is implemented.

Why delay?

When considering ways to improve their cash position and improve efficiency, outsourcing is usually one of the first options that organisations consider. After all, outsourcing services can make an immediate difference to the bottom line, by reducing expenditure and the agreed payment terms usually allow scope for some cash flow improvement too. While it’s important to agree the terms of the service carefully and in detail, it also doesn’t make sense to delay unnecessarily. There is usually no real reason to delay.

Andy Vaughan is managing director at Resource Group, a leading supplier of outsourced services to organisations in the private and public sectors.