Outsourcing: The U.S. Business Revolution Spring 1997 Copyright © Michael F. Corbett & Associates, Ltd., 1997 Customer Confidential. Reproduction in whole or in part is strictly prohibited. Outsourcing: The U.S. Business Revolution Published by: Michael F. Corbett & Associates, Ltd. Lexington Park, East Bldg. Suite A 255 Route 55 LaGrangeville, NY 12540 (845) 452-0600 (845) 452-6988 (fax) Email:
[email protected] Copyright Ó Michael F. Corbett & Associates, Ltd. 1997 All rights reserved. Michael F. Corbett & Associates reports are limited publications containing valuable management information provided to a select group of customers in response to orders and our customers acknowledge when ordering that the reports are for our customer’s own internal use only and not for general publication or disclosure to third parties. This report may not be copied or given, lent or resold to third parties without written permission nor may its contents be disclosed to non-customers without written permission. Information is believed to be reliable but cannot be guaranteed to be correct or complete. Copyright © Michael F. Corbett & Associates, Ltd., 1997 2 Customer Confidential. Reproduction in whole or in part is strictly prohibited. Table of Contents SECTION 1: OUTSOURCING: BACKGROUND, DEFINITIONS & DECISION FACTORS 5 OUTSOURCING DEFINED 5 TRADITIONAL ORGANIZATIONAL STRUCTURES 6 OUTSOURCING’S EMERGENCE AS A POWERFUL MANAGEMENT TOOL 7 DRIVING FACTORS 12 OUTSOURCING AS A “MAKE VERSUS BUY” DECISION 12 TOP TEN REASONS COMPANIES OUTSOURCE 17 TYPES OF SERVICES OUTSOURCED AND SELECTED CASE STUDIES 21 THE OUTSOURCING CONTINUUM 21 CLEANING 21 FOOD SERVICES 23 COPY CENTERS 23 MAILROOM OPERATIONS 24 PAYROLL 25 FACILITY MANAGEMENT 25 HUMAN RESOURCES 27 TRANSPORTATION & LOGISTICS 28 INFORMATION TECHNOLOGY 30 MARKETING & SALES 36 FINANCE 37 THE OUTSOURCING PROCESS 39 STRATEGIC ANALYSIS 39 IDENTIFYING BEST CANDIDATES 39 DEFINING REQUIREMENTS 40 SELECTING PROVIDER(S) 41 TRANSITIONING THE OPERATION 41 MANAGING THE RELATIONSHIP 42 Copyright © Michael F.