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Outsourcing: Opportunity and Risk

Randy Soifer Grant Thornton LLP National Business Consulting Service Line Leader (780) 401-8240 / rsoifer@GrantThornton.ca. Outsourcing: Opportunity and Risk. Agenda. What is outsourcing? What are the opportunities? Why should you consider outsourcing? What are the potential pitfalls?

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Outsourcing: Opportunity and Risk

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  1. Randy Soifer Grant Thornton LLP National Business Consulting Service Line Leader (780) 401-8240 / rsoifer@GrantThornton.ca Outsourcing: Opportunity and Risk

  2. Agenda • What is outsourcing? • What are the opportunities? • Why should you consider outsourcing? • What are the potential pitfalls? • What are the elements of successful outsourcing?

  3. What is outsourcing? • Contracting with a vendor to provide a service rather than providing it yourself • Widespread in the corporate sector • Becoming more common in the higher education / not-for-profit sector

  4. What are the opportunities for outsourcing? • You can outsource practically anything!

  5. Bookstore Endowment Management Food Services Housekeeping Legal Services Payroll Pension Administration Security Telecommunications Vending Services Traditional

  6. Benefits Administration Conference Administration Duplicating Services Health Services Human Resources Information Systems Residence Halls Training & Development Web Site Development Maintenance New

  7. Why should you consider outsourcing? Most important reason: Focus more directly on core functions such as education and research, reducing time and attention devoted to support activities. Anything outside of your mission statement.

  8. Higher quality service Expertise / experience More cost effective or efficient (more up to date and sophisticated technologies, for instance) More qualified personnel (with career track) May not have been able to successfully manage function Operating expense may be less Limited or no capital investment Less attention is required Shifts some accountability Possible reasons to outsource

  9. What are the potential pitfalls to outsourcing? • Less quality • Less institutional control • Higher financial costs • Ethical / social costs

  10. What are the elements of successful outsourcing? • Clear communication • Clear accountability • Clear objectives and methods of evaluation • Staff of the provider of services treated fairly • Demonstrated commitment to customer service and sensitivity

  11. Other factors to consider • Institution must still provide oversight of outsourced services – it cannot abdicate responsibility for quality and cost • Cost reduction isn’t a sufficient reason • Institutional expertise and memory might disappear

  12. Other factors to consider • Staff of the service provider have a primary allegiance to that provider, not to the institution • The “corporate” culture of the service provider could clash with the institution’s culture

  13. Independent advice and information • Developing outsourcing strategy and criteria • Assessing candidates for outsourcing • Identifying and evaluating vendors

  14. Thank you!Randy Soifer(780) 401-8240rsoifer@GrantThornton.ca

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