http://assessment-tool-outsourcing.blog.de/
Due to the fact of increasing globalization, mergers & acquisitions, cost pressure and growing expectations of the customers regarding price and quality, companies have to reconsider their strategy and organizational structure. If companies are not able to stand the challenge and can’t fulfill the expectations they will loose customers and consequently market share. To remain competitive they have to shorten the development time for products and optimize methods, structures and organizations in regard to cut the costs. To face these challenges appropriate solutions are needed. One possibility to achieve this is outsourcing. The special type IT-outsourcing (ITO) is already accomplished by many companies but more and more companies are taking into account the possibility of business process outsourcing (BPO). BPO is very critical and has to be considered carefully. Companies give away their in-house functions to external service provider. This comprises a dependency and requires a high degree of trust. Once the decision is made it is hard and cost intensive to reverse it. Finding an appropriate business model for example shared service centers, joint ventures or outsourcing to an external provider and identifying adequate onshore, nearshore or offshore locations requires profound knowledge and intensive consulting support.
The first chapter introduces into this thesis. Chapter 2 gives a fundamental theoretical background of the outsourcing terminology including the types of outsourcing, intelligent sourcing terminology and different outsourcing models. The next chapter covers BPO of procurement, a special area of BPO. It describes the relevance for outsourcing the procurement function with its advantages and disadvantages. Furthermore the current market situation as well as possible locations for procurement BPO are part of this chapter. Part 4 presents gedas company and provides general information regarding the organization and the service portfolio. In chapter 5 information about the development of the assessment tool are provided. The gedas consulting framework is briefly introduced and it is shown how the intelligent sourcing framework can be integrated into to the existing gedas consulting framework. The main part covers the description of the development of the assessment tool for procurement BPO and its different components followed by a case study.
Contents
1 Introduction
1.1 Motivation
1.2 Objectives and scope
1.3 Outline of the document
2 Terminology
2.1 Consulting
2.2 Outsourcing
2.2.1 Types of outsourcing
2.2.1.1 IT-outsourcing
2.2.1.2 Business process outsourcing
2.2.2 Intelligent sourcing location terminology
2.2.2.1 Offshoring
2.2.2.2 Nearshoring
2.2.2.3 Onshoring
2.2.3 Outsourcing models
2.2.3.1 Full business process outsourcing
2.2.3.2 Shared service center
2.2.3.3 Joint venture
3 Procurement business process outsourcing
3.1 Why outsource procurement functions?
3.2 Market trends
3.3 What can be outsourced?
3.4 Locations
3.5 Examples for procurement BPO
4 Presentation of the IT service company gedas AG
4.1 About the company
4.2 History
4.3 Organization of the company
4.4 Service portfolio
5 Development of a business process outsourcing assessment tool
5.1 Development of the procurement BPO assessment tool
5.1.1 Questionnaire
5.1.1.1 general
5.1.1.2 IT
5.1.1.3 Strategy
5.1.1.4 Office equipment/services/IT-licences
5.1.2 Visualization
5.1.2.1 Benchmarking tool
5.1.2.2 Procurement costs
5.1.2.3 Scoring model
5.1.3 Help
5.1.3.1 Summary
5.1.3.2 Glossary
5.1.4 Location assessment tool
5.1.5 Investment tool
5.1.6 Service offering portfolio
5.1.7 Assessment tool documentation
5.2 Integration within existing consulting framework
5.3 Case study
5.3.1 Approach
5.3.2 Case companies
5.3.3 Results
5.3.4 Conclusions of case results
6 Summary, conclusion and outlook
6.1 Summary
6.2 Conclusion
7 Bibliography
Objectives and Scope of the Thesis
The primary goal of this diploma thesis is the development of a comprehensive assessment tool to support gedas consultants in evaluating client organizations that are considering the outsourcing of their procurement functions. The research aims to provide a structured methodology for identifying suitable outsourcing business models, optimal global locations, and necessary investment strategies while benchmarked against industry standards.
- Theoretical foundation of outsourcing terminology and models.
- Market analysis of procurement BPO trends and regional location advantages.
- Design and implementation of a modular assessment tool (questionnaire, benchmarking, investment modeling).
- Validation of the assessment framework through practical case study scenarios.
Excerpt from the Book
3.1 Why outsource procurement functions?
Over the last years the pressures of globalization, regulation, and cost control have widened the door for the outsourcing of procurement functions. Enterprises have acted to improve their procurement organizations’ skills to answer those challenges and many won’t hesitate to look outside for a third party provider to perform the procurement-related functions that can’t be done in house. (cf. AberdeenGroup 2006, p. 1)
According to the AberdeenGroup procurement outsourcing benchmark report (2006) the main benefits that companies expect within the next two years are:
Enhanced ability to support or accelerate global sourcing activities
Refocusing of procurement professionals on more strategic activities
Enhanced ability to track and report savings to the company’s bottom line
Fewer full-time employees
Improved visibility into spending
Shorter procurement processing cycles
Improved compliance with preferred suppliers
Standardized procurement procedures
Access to hosted sourcing/procurement automation
Access to spending category expertise
Lower transactional processing costs, fewer burdens
Lower overall material/product/service costs
Access to improved pricing
Access to supplier intelligence
Summary of Chapters
1 Introduction: Provides an overview of the thesis, outlining the motivation, the specific objectives, and the scope of the project regarding BPO consulting.
2 Terminology: Defines the fundamental concepts of consulting and outsourcing, including the various models like shared service centers and joint ventures, and discusses intelligent sourcing locations.
3 Procurement business process outsourcing: Explores the specifics of outsourcing procurement, including current market trends, the advantages and challenges of outsourcing procurement functions, and potential geographic locations for such services.
4 Presentation of the IT service company gedas AG: Offers an overview of the company's history, organizational structure, market position, and its service portfolio.
5 Development of a business process outsourcing assessment tool: Describes the design and development of the procurement BPO assessment tool, including its components like the questionnaire, benchmarking, and investment modeling, followed by a case study verification.
6 Summary, conclusion and outlook: Summarizes the key findings of the thesis, evaluates the successful completion of the assessment tool development, and provides a final conclusion on the project's impact.
7 Bibliography: Lists the academic and industry sources used for the research.
Keywords
Outsourcing, Business Process Outsourcing, BPO, Procurement, Procurement BPO, Assessment Tool, Consulting Framework, Benchmarking, Intelligent Sourcing, Shared Service Center, Joint Venture, Offshoring, Nearshoring, Onshoring, Supply Chain Management
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on developing a professional assessment tool to help consulting firms evaluate the readiness and potential for companies to outsource their procurement operations.
What are the primary thematic fields covered?
The work covers outsourcing terminology, procurement-specific BPO, corporate organizational structures, and the development of quantitative analytical tools for business decision-making.
What is the central research objective?
The aim is to design and implement a practical consulting framework and assessment model that allows consultants to provide data-driven recommendations on outsourcing models for procurement.
Which scientific or analytical methods were employed?
The author utilized literature reviews to establish theoretical foundations, integrated benchmarking methods based on industry standards, and used case study methodology to verify the tool's practical functionality.
What does the main body of the work address?
The main part of the thesis details the construction of the assessment software (consisting of questionnaires, visualization of costs, and scoring models) and explains how to integrate this tool into existing company consulting frameworks.
Which keywords best characterize the work?
Key terms include Procurement BPO, Outsourcing, Benchmarking, Assessment Tool, and Intelligent Sourcing.
Why was the assessment tool designed in a modular way?
It was designed modularly to allow for flexible adaptations to specific procurement sub-processes like office equipment, IT-licenses, or services, depending on the client's needs.
How does the author define a "saving potential" within the tool?
Saving potential is calculated by measuring the gap between the client's current procurement cost metrics and the benchmark values of "best in class" companies in the same sector.
What is the role of the investment tool within the assessment?
The investment tool evaluates the one-time costs associated with setting up a shared service center or outsourcing operation, including expenses for shadow operations, hiring, and infrastructure.
- Quote paper
- Mathias Trojahn (Author), 2006, Development of an Assessment-Tool for Procurement Business Process Outsourcing, Munich, GRIN Verlag, https://www.grin.com/document/116646
