ABSTRACT
In order to understand the services that need to be outsourced, organizational goals need to be identified — particularly the core competencies. Once the goals and core competencies are identified, information related to these activities is gathered to compare the cost of performing the functions in-house with the cost of outsourcing them. This enables the company to answer nonfinancial questions such as “How critical are these functions and activities?” or “What depends on these activities?” or “Will this activity become a ‘mission critical’ activity?” This will help organizations reach decisions about whether or not to outsource. Long-term cost and investment implications, work morale, and support should also be considered (see Appendix D for sample cost-benefit analysis worksheets).
PHASE 2: NEEDS ASSESSMENT AND VENDOR SELECTION
