If you’re not at the stage of bringing in contractors, you better get used to the idea because there will be things that are better managed by other professionals, and there’s other things your business simply requires that you will not have the internal resources to manage in-house.
You need to work with partners.
If not now, then you soon will in the future. Your business will eventually be looking to outsource something or other. It could be as simple as a uniform cleaning service or it could be your entire janitorial services.
Whatever it is you need to bring in outside help for, the key ingredient you need to get your outsourcing right is analytics.
Now…the larger your company is, the more data you will have. When you’re working at enterprise level – managing multiple sites – you will essentially need big data analytics and staff on hand to manage your data, analyse it and scrutinise it for efficiencies across your entire operation.
If you don’t have the procurement specialists aboard your organisation, then an option open to you is to outsource your outsourcing for which you’ll need a procurement specialist to assist you with data optimisation for savings realisations.
What you’re looking for in your analytics to improve outsourcing efficiencies
Those are the three areas of your company’s data that you need to have access to, to manage your outsourcing efficiently.
This will need periodically reviewed. Many firms have pricing policies in place for which annual price increases form part of the contractual process. Opposite from what you might expect, the longer you deal with the same supplier, the costs aren’t always the best you can get.
This is true for domestic contracts as much as it is for the commercial sector. It’s often better to switch suppliers but in doing so, you can’t neglect the quality of service being provided. Over time, depending on your in-house quality requirements, you may be better placed sticking with a premium service provider if it means you’re guaranteed consistent quality because your supplier will know your business better.
Take for example a five-star hotel or a Michelin starred restaurant. Getting the linen washed (be it bedding or gleaming white table covers) may be a basic service for some cleaning suppliers, but to maintain your standards, your current supplier may be investing in top of the range equipment to ensure your whites are whiter than white, enabling you to maintain the highest of quality standards for your end-users.
That being said, you still need to be reviewing contracts. That’s why that’s listed second on the list of areas to monitor.
Your contracts should always have a start and end date. As you approach your end date and your contract nears renewal, it’s not just a case of deciding whether to stay or switch. It’s a chance to get back to the table and renegotiate everything within the contract.
Without reviewing contracts periodically, any bottlenecks that your data show you to be happening, won’t be eliminated.
Use your contract renewals to ensure your suppliers are on the same page as you so they can provide you a top-notch level of service. They can’t do that if you don’t tell them what you need them to do to take care of your customers.
One idea you can and should be doing is surveying your customers to ensure that any problems are identified and brought to the attention of your suppliers so they can be rectified. Every supplier you bring aboard your operation will affect your customers at some point. That’s why these contract renegotiations are super important. It’s your chance to maintain and even enhance your customer’s user-experience.
The last piece of actionable advice for strategic outsourcing using your data analytics is to monitor your suppliers.
Where possible, consolidation is best.
The fewer suppliers you have, the less administration you have, and the more efficient your business will operate.
· Minimise suppliers
· Review contracts periodically
· Monitor your expenditure
Those are the three areas to use your analytics for when you’re outsourcing. The more efficiently you can manage those three aspects of your outsourcing, the better quality of service your suppliers should be able to deliver to your business, with continually bettered contractual agreements, terms of service, service level agreements and sometimes pricing (but not always depending on what you need).
Using your data smartly is the best way to improve efficiencies and drive cost savings across your business.
Image courtesy of data-analytics.github.io.