Outsourcing is the handing over of a non-core operation of an organziation to an external agency, which is an expert in that particular function. It is a typical strategy adopted by most of the companies especially when it comes to Information Technology. it outsourcing has become a practise for most of the firms across the world. The whole process of Outsourcing involves the following steps:
• Deciding whether to outsource or not: The decision to outsource takes place at a strategic level. This would entail deciding what is to be outsourced and building a business case to justify the decision.
• Supplier Proposal: Suppliers are shortlisted based on the proposal and price issued by them.
• Selecting a Supplier: the supplier is selected based on the proposals. The selection may include holding interviews to clarify the client requirement and supplier response. Supplier is selected from the BAFO ( best and final offer) submitted by them.
• Negotiation: Based on the proposals and BAFO, a contractual agreement is signed between the client and the supplier. This stage finalizes the documentation and final pricing structure.
• Finalizing the contract: this involves a contract agreement between the supplier and client involving a legally binding document
• Transition: the transition phase begins from effective date and usually runs for four months involving process for staff transfer and take on of services.
• Transformation: this involves execution of agreement and lasts for the term of contract.