Insourcing is an organisation’s decision to take back in-house operational processes, functions, projects and employees that were undertaken by (outsourced to) a third party organisation.
What should you expect from Insourcing?
Better control over services and lower costs. Insourcing can allow you:
To build competitive advantages over and above similar organisations that use outsourcing to deliver their operational processes
You also, by definition of the employees that created it, retain any Intellectual Property during the employees’ tenure
Keeping one culture is always advantageous, as culture can clash with outsourced suppliers
Costs can also be a major advantage – if you know ‘what good looks like’ for the service you want to insource, then you can recruit the right people and save considerable service costs
Direction and control of the operational processes is also retained in house.
Benefits of using BPG to facilitate Insourcing back to your organisation
We know what practices work really well. Having optimised over 500 complex supplier relationships, we have deep expertise of trust building in relationships with suppliers you wish to exit services from, along with assessing your internal capability to assure the service can be safely and effectively delivered in-house. Our proven method helps you achieve your outcomes, quickly.
What BPG delivers
Maximum value from your service repatriation. We help you assure:
Your business case for insourcing is independently validated
Requirements and expectations are internally agreed within your organisation
Your exit and transition arrangements from the outsourced supplier are clearly communicated
That you’ve minimised any commercial cost risks in the supplier’s contract
That the exit process from the incumbent supplier is safely managed to assure maximum value from the insourcing process.
Why BPG’s process is so important
A stable relationship promotes innovation. BPG’s ‘Optimise’ process will drive great behaviours between you and both your exiting supplier and the newly created in-house service delivery team, reducing BAU costs where practical.
Considerations of Insourcing/Services Repatriation
How do you undertake Insourcing?
There are a number of key considerations, but in principle:
Terminating for convenience. If you are terminating the outsourced supplier because of ‘convenience’ (not for supplier service failings), then relationships between you and the outgoing supplier have to be very carefully managed to ensure any exit costs are minimised and performance levels are kept high during the exit and transition process. Clear communication to the appropriate senior stakeholders within the supplier is key.
Terminating for poor service delivery. If you are terminating the service for breach of the outsourced supplier’s poor service, then relationships are likely to be very frayed. We often act as a critical friend to both supplier and client, and at the same time, ensuring your contractual position is protected. In turn, we continue to motivate the supplier to provide assistance (or at least not get in the way) during the exit and transition process to the insourced target operating model.
What challenges typically arise?
There are many challenges with moving to an in-sourced/mixed economy delivery model. Some of the key issues are:
Internal resistance to change from both operatives and senior management
Not measuring costs or service levels before moving from an outsourced service to the insourced service and therefore, being unable to assess whether you are achieving better value for money to senior stakeholders when the insourced service moves into business-as-usual status
Not having clarity of the processes being operated by the outsourcer pre-in-house implementation
Not appointing a full-time project team early in the process
Not focusing sufficiently on the transition period
Not having a robust project plan clarifying employee resources
Becoming bogged down standardising technology and processes pre-implementation
Having little risk management, monitoring or contingency planning
Not undertaking an appropriate options appraisal to independently validate whether insourcing or outsourcing is the most effective option.
Foundations for Success
Some key principles can be implemented to assure success at an early stage. Some of these include:
Articulate your service expectations so that it is clear what your organisation can achieve that it could not before the service is brought in-house
Share the in-house vision on a collaborated basis
Baseline your existing service levels and costs pre-in-house-repatriation, so you can measure progress
Clarity over the business case
Plan to have a clear governance process, across the relationships with the outgoing provider and in-house Subject Matter Experts (SMEs)
Implement an appropriate performance management structure
Govern change management
Develop a fit for purpose target operating model, along with supporting technology considerations
Have clear SLAs for internal service delivery
Pilot test in-house services in defined areas to assess implementation practicalities
Develop an appropriate exit and transition roadmap
Implement knowledge transfer governance
Develop a service and contract re-shaping process and on-going performance benchmarking to assess value for money against pre-defined baselines.
Some examples of Insourcing/Services Repatriation Relationships we support you in
HR, Payroll and Human Capital
Customer Service/Contract Centres
Hard and Soft Facilities Management
Manufacturing and Repair Operations
Adult and Child Social Care
Legal and Professional Services
Waste and Environmental Services
Highways and Infrastructure
A few examples of the strategic suppliers we know well
Action for Employment Ltd
A-One Integrated Highway Services
Babcock International Group
Bytes Technology Group
Carlson Wagonlit Travel
Costain-Skanska A14 Joint Venture
Ernst and Young
HCR Group Holdings
Heckler and Koch
Interserve Site Services
Land Securities Trillium
Morgan Vinci Mcalpine Joint Venture
Purple Foodservice Solutions
Reed Specialist Recruitment
Road Management Services
Turner & Co. (Glasgow)
Vinci McAlpine Joint Ventureworking
What stage are you at in your Insourcing and Supplier exit process ?
You’re procuring or contracting and you need it to work really well.