Outsourcing A Guide to ... Selecting the Correct Business Unit ... Negotiating the Contract ... Maintaining Control of the Process

by Bragg, Steven M.

• ISBN13: 9780471676263
• ISBN10: 0471676268
• Edition: 2nd
• Format: Hardcover
• Copyright: 2006-02-03
• Publisher: Wiley

Summary

"As companies in growing numbers look to outsource functions not related to their core competencies, Bragg's work provides an excellent road map. Demonstrating a firm grasp of the topic, he intelligently walks the reader through the maze, analyzing all aspects of the process (including whether the function should or should not be outsourced). This is a must-read for both novices and veterans alike." --Mary S. Schaeffer Editorial Director and Publisher Accounts Payable Now & Tomorrow "Steve Bragg's Outsourcing gives business decision-makers the insights needed to make the case for or against outsourcing. The first half provides a thorough discussion of all aspects, including evaluating risks and rewards, selecting, contracting, and terminating. The second half provides in-depth analysis of ten different types of outsourcing services, including janitorial, customer service, and accounting. This book provides practical advice that will benefit everyone regardless of the extent of their prior experience." --Dr. Will Yancey, PHD, CPA Independent Consultant "Once again, Steve Bragg has compiled a comprehensive, well-written book that will yield an excellent return on time invested by readers. This is a must-have guide in outsourcing for any manager, whether newly exposed or an expert. I came away with some great ideas from the book!" --James A. Bologa Executive Vice President and CFO Daticon Inc. "Use of carefully considered outsourcing can be a critical component of any corporate strategy. In Outsourcing, Steve Bragg has given an excellent overview of why and when outsourcing should be considered, some precautionary thoughts, and specifics of how to successfully implement and manage any outsourced functions. He has created an excellent guide to the use of outsourcing as a means to enhance corporate success in today's challenging business climate." --Richard V. Souders President and CEO Premier Data Services

Author Biography

Steven M. Bragg, CPA, CMA, CIA, CCP (Certified Computing Professional), CPM (Certified Purchasing Manager), and CPIM (Certified Production and Inventory Manager). He is the Controller of Teague Equipment, a multilocation company that assembles trucks for the utility and construction industries (revenues of $16 million). He is responsible for all accounting, finance, internal audit, and IT functions.
Prior to joining Teague Equipment, he was the CFO of Isolation Technologies, a company that manufactures customized isolation chambers used to produce drugs in a cleanroom environment. Before that, Bragg was the Controller of Carts of Colorado, a subsidiary of the Pepsi Cola Company. His responsibilities included accounting, purchasing, production control, IT, and warehousing functions. Other positions that Bragg has held include Manager at Ernst & Young, Senior Cost Accountant at Jolly Rancher Corp., Assistant Controllers at Spinnaker Software Corp., and Staff Auditor at Deloitte & Touche.

Table of Contents

Preface	xi
About the Author	xv
1 Strategy of Outsourcing	1	(16)
Overview of Outsourcing	1	(7)
Outsourcing Risks	8	(2)
Initiating Outsourcing	10	(1)
Companies That Take Over Outsourced Functions	11	(3)
Summary	14	(3)
2 Outsourcing a Function	17	(28)
How to Find an Outsourcing Supplier	18	(1)
Evaluating Potential Outsourcing Suppliers	19	(10)
Cost of the Outsourcing Relationship	29	(2)
Personnel Issues	31	(3)
Transition Issues	34	(4)
Relations with the Outsourcing Partner	38	(3)
Measuring the Service Level of Each Outsourced Function	41	(2)
Summary	43	(2)
3 Contractual Issues	45	(30)
Constructing the Contract	45	(2)
Contract Clauses	47	(10)
Function-Specific Contractual Issues	57	(17)
Summary	74	(1)
4 Managing the Supplier	75	(16)
Functional Coordinator	75	(1)
Legal Management	76	(1)
Outsourcing Advisory Committee	76	(1)
Outsourcing Sponsor	77	(1)
Management of Specific Functional Areas	77	(11)
Management of International Suppliers	88	(1)
Summary	89	(2)
5 Terminating the Outsourcing Arrangement	91	(14)
Termination Scenarios	91	(1)
Termination Avoidance	92	(1)
General Termination Issues	93	(1)
Function-Specific Termination Issues	94	(9)
Summary	103	(2)
6 Accounting for the Outsourced Company	105	(24)
Impact on Data Collection	106	(2)
Impact on Financial Reporting	108	(3)
Impact on Controls	111	(5)
Impact on Performance Measurement	116	(5)
Impact on Transactions	121	(5)
Summary	126	(3)
7 Outsourcing the Accounting Function	129	(30)
Advantages and Disadvantages	131	(10)
Transition Issues	141	(5)
Creating Control Points	146	(2)
Measuring the Outsourced Function	148	(8)
Potential Customer Service Issues	156	(1)
Summary	157	(2)
8 Outsourcing Computer Services	159	(26)
Advantages and Disadvantages	161	(7)
Transition Issues	168	(4)
Creating Control Points	172	(3)
Measuring the Outsourced Function	175	(6)
Potential Customer Service Issues	181	(2)
Summary	183	(2)
9 Outsourcing the Customer Service Function	185	(20)
Advantages and Disadvantages	186	(4)
Contract-Specific Issues	190	(3)
Transition Issues	193	(3)
Creating Control Points	196	(3)
Measuring the Outsourced Function	199	(2)
Potential Customer Service Issues	201	(2)
Summary	203	(2)
10 Outsourcing the Engineering Function	205	(30)
Advantages and Disadvantages	206	(5)
Transition Issues	211	(8)
Creating Control Points	219	(5)
Measuring the Outsourced Function	224	(6)
Potential Customer Service Issues	230	(3)
Summary	233	(2)
11 Outsourcing the Human Resources Function	235	(16)
Advantages and Disadvantages	236	(4)
Transition Issues	240	(2)
Creating Control Points	242	(1)
Measuring the Outsourced Function	243	(5)
Potential Customer Service Issues	248	(2)
Summary	250	(1)
12 Outsourcing the Logistics Function	251	(22)
Advantages and Disadvantages	252	(6)
Transition Issues	258	(5)
Creating Control Points	263	(3)
Measuring the Outsourced Function	266	(4)
Potential Customer Service Issues	270	(2)
Summary	272	(1)
13 Outsourcing the Maintenance and Janitorial Functions	273	(28)
Advantages and Disadvantages	274	(2)
Transition Issues	276	(6)
Creating Control Points	282	(12)
Measuring the Outsourced Function	294	(4)
Summary	298	(3)
14 Outsourcing the Manufacturing Function	301	(28)
Advantages and Disadvantages	303	(5)
Transition Issues	308	(8)
Creating Control Points	316	(2)
Measuring the Outsourced Function	318	(6)
Potential Customer Service Issues	324	(3)
Summary	327	(2)
15 Outsourcing the Sales and Marketing Functions	329	(20)
Advantages and Disadvantages	330	(2)
Transition Issues	332	(5)
Creating Control Points	337	(3)
Measuring the Outsourced Function	340	(6)
Potential Customer Service Issues	346	(1)
Summary	347	(2)
16 Outsourcing the Administration Function	349	(16)
Advantages and Disadvantages	351	(4)
Transition Issues	355	(2)
Creating Control Points	357	(2)
Measuring the Outsourced Function	359	(3)
Potential Customer Service Issues	362	(1)
Summary	363	(2)
Appendix Summary of Performance Measurements	365	(12)
Accounting	365	(2)
Computer Services	367	(1)
Customer Service	368	(1)
Engineering	369	(1)
Human Resources	370	(1)
Logistics	370	(1)
Maintenance and Janitorial	371	(1)
Manufacturing	372	(2)
Sales and Marketing	374	(2)
Administration	376	(1)
Index	377