Insourcing/Hybrid/Mixed Economy

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 costsInsourcing 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 wellHaving 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 innovationBPG’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

  • IT Services
  • HR, Payroll and Human Capital
  • Inventory
  • Finance
  • Marketing Services
  • Customer Service/Contract Centres
  • Hard and Soft Facilities Management
  • Manufacturing and Repair Operations
  • Adult and Child Social Care
  • Procurement Services
  • Legal and Professional Services
  • Accounting/Taxation Services
  • Waste and Environmental Services
  • Highways and Infrastructure

A few examples of the strategic suppliers we know well

  • 3m
  • Accenture
  • Action for Employment Ltd
  • Amey Group
  • A-One Integrated Highway Services
  • Aspire
  • Atkins
  • Atos Origin
  • Babcock International Group
  • Bae Systems
  • Balfour Beatty
  • Bfs Group
  • Birse Civils
  • BT Group
  • Bytes Technology Group
  • Capgemini
  • Capita
  • Carlson Wagonlit Travel
  • Computacenter
  • Costain-Skanska A14 Joint Venture
  • CSC
  • Deloittes
  • Dennis Eagle
  • Dtz Holdings
  • Enterprise
  • Ernst and Young
  • ESH Group
  • Ferrovial
  • Fujitsu Services
  • G4s
  • Galliford Try
  • Genesys Telecommunications
  • HCR Group Holdings
  • Heckler and Koch
  • Hewlett-Packard
  • IBM
  • Interserve Site Services
  • KBR
  • Keir Group
  • KPMG
  • Lakehouse
  • Land Securities Trillium
  • Logica
  • Man
  • Mantix
  • Mitie
  • Modus Services
  • Morgan Sindall
  • Morgan Vinci Mcalpine Joint Venture
  • Purple Foodservice Solutions
  • Reed Specialist Recruitment
  • RMPA Holdings
  • Road Management Services
  • Seddon Group
  • Serco Group
  • Shaw Trust
  • Skanska UK
  • Sodexo
  • Steria
  • Turner & Co. (Glasgow)
  • Veolia
  • Vinci McAlpine Joint Ventureworking
  • Viridor
  • Wates Group
  • Willmott Dixon
  • Xerox

What stage are you at in your Insourcing and Supplier exit process ?

New Relationship

You’re procuring or contracting and you need it to work really well.

Existing Relationship

You’re in a partnership that could be working better.

Broken Relationship

It’s gone wrong. You need help to exit a relationship early and safely transition to another.