Question

You have run into an obstacle with your relocation project. This snag will require you to outsource a portion of the project (the installation of a corporate Wi-Fi network) to another firm. What will be your process for procuring this service? What are some of the risks associated with outsourcing? Of the risks you listed, which outsourcing risk is most important to address? Why

Answer 1

What will be my process  for procuring  outsourcing a portion of the project to another firm?

I will keep some steps in my mind and follow some steps.

The steps are:

Defining and Developing the Outsource Work Requirements Structure..This will be the most important part for outsourcing the project to another firm .Since outsourcing represents a long-term relationship with another firm, it is critical to define not only the desired results but also the type of relationship needed for ongoing success.

Selecting partners;This includes the rights to review and approve important personnel, how the transition will be managed.We will need to draw final agreement contract which will include penlties and incentives,guarantee of performance,key personnel and relationship structure

Management step: We need to define internal and external communication with the firm,We wil also set baseline for internal benchmark and define schedules and interfaces.

we will also need to provide meetings to both the firms in interpersonnel level.

2>  risks associated with outsourcing are:

Risk 1. The Ability of the Outsourcing Company to Nurture my Project

We need to check the quantity of the long-term projects/clients and the amount of successful projects – for the past year. WE need to check the company website and all its information

Risk 2. Loss of the Control

Risk 3. Confidentiality of information

Risk 4. Geolocation:
The problem of working hours is differnt in different country

Risk 5: Poor Mutual Understanding of the Contract

Risk 6:Client Retained Team Lacks Required Skills

Which outsourcing risk is most important to address? Why

Poor Mutual Understanding of the Contract

After signing the initial contract, both the client and service provider have multiple team members who are trying to manage the initial implementation activities and ongoing operations. The client has staff who are just learning the details of the agreement, may be emotionally charged regarding the decision to outsource and also have a personal view of what the service provider should (and should not) perform. The service provider has team members who are also new to the transaction, and sometimes bring a view of "this is what we did in my last deal" without fully understanding nuances of the specific agreement that has been negotiated. The significant number of new people combined with a high speed of implementation impairs a requisite absorption period,leading to uninformed views on both sides of what’s in the contract.