Enhancing Corporate Capabilities Through Outsourcing
- Introduction
- Methodology
- Making the Decision to Outsource - or Not
- Table of Contents
- Download Executive Summary
- Purchase This Study
Introduction
Our dynamic industry, like all sectors of American business, faced a myriad of competitive challenges this year and undoubtedly will continue to do so well into the future. Consequently, the Equipment Leasing & Finance Foundation placed a major emphasis in 2007 on examining company operations and productivity issues for its members. In this spirit, The Foundation commissioned a white paper on the growing practice of Business Process Outsourcing.
The white paper examines how outsourcing select business processes in the typical equipment leasing and finance company can enhance its capabilities and performance. Within this context, business process outsourcing focuses on the workflow within an enterprise. We specifically evaluate how it can be redesigned and managed to optimize the efficiency of individual business processes and overall workflow. The author intends to provide a balanced evaluation of business process outsourcing, presenting both the advantages and disadvantages of pursuing this strategy.
Methodology
The findings presented in this white paper were derived from four sources:
- An online survey of equipment leasing and finance professionals from a variety of companies with various position responsibilities.
- Lengthy telephone interviews with leasing professionals at 14 diverse lessors, as well as two software companies and two outsource companies that support the industry.
- In-person meetings with teams of leasing professionals at five diverse companies in the industry, as well as one outsource company.
- A review of current business process outsourcing literature.
Making the Decision to Outsource - or Not
The decision to outsource one or more business processes begins with a commitment to have the best possible workflow system. The question one must ask is how open to change is the organization? The process for evaluating workflow and determining the best course of action involves several steps:
- Appointment of a review leader and workflow team - Led by a leader who is not adverse to change and understands disruption is part of the process, the team includes various business, financial and technical personnel.
- Review and confirmation of the organization's business model - This includes careful evaluation of one's customers, the business' value proposition, profit model, business scope and process for managing and controlling workflow.
- Evaluation of each business process - A number of factors are taken into consideration when analyzing a process. This includes determining if it is a core function as described earlier and its nature and criticality to the organization. Additional factors include its complexity, scalability, automation and scope, among others.
- Identification of alternatives for improving business workflow - Companies typically use selective outsourcing when they are faced with a specific problem, opportunity, technology change, new organizational reality or compliance issue. A comprehensive outsourcing approach is more strategic in nature, often involving all workflow processes and supporting technology.
- Development of outsource plan - In addition to clearly stating all financial and productivity/capability goals, this plan should address all issues critical to transitioning and the subsequent working relationship with the outsource provider.