Outsourcing Professional Body of Knowledge - OPBOK Version 10

International Association of Outsourcing Professionals

• Publisher: Van Haren Publishing
• Year: 2014
• Print ISBN: 9789401800006
• eBook ISBN: 9789401805452
• Topic: Education
• Subtopic: Architecture General

Outsourcing is here to stay. It is inextricably linked to the globalization of business. International trade networks continue to connect the world's economies and organizations increasingly turn to partners, often through outsourcing, to help them: - better leverage what they are best at, - gain greater flexibility and reach and - drive down their overall business costs and risks. The Harvard Business Review lists outsourcing as one of the most important new management ideas and practices of this century. This substantial title is the official version of the Outsourcing Professional Body of Knowledge by IAOP (International Association of Outsourcing Professionals), in short: OPBOK. This is the official publication of OPBOK Version 10. This new version has been revised on these points: - New appendix on applicable Rules and Regulations applicable to outsourcing. - New appendices mapping COP Standards to eSCM-SP and eSCM-SP capability models. - New and updated definitions on various forms of outsourcing, graphics, and templates. - More detailed discussions on: various outsourcing geographies, renewing and exiting agreement options, change management, multi-sourcing management and roles of PMO, and other new trends in outsourcing. Also, this Version 10 of OPBOK identifies the best practices of outsourcing professionals around the globe and presents the reader with a complete and practical guide to this emerging, complex discipline. It gives readers full guidance on the critical 'make or break' factors in any outsourcing program: - governance and defining a strategic approach to Outsourcing; - identifying and communicating business requirements; - selecting and qualifying providers; - gaining internal buy-In, creating project teams; - value assessment (value for money and return on investment). This authoritative title provides an invaluable resource for any outsourcing professional: the best practice guidance is complemented by practical checklists and templates. Readers can therefore apply rigorous disciplines to ensure internal and external requirements are fully considered and implemented at each stage of the process. To support the application of OPBOK in organizations, the templates in Appendix A are also available as separate publication: Outsourcing Professional Body of Knowledge: OPBOK Version 10 - Templates (978 94 018 0536 0) It will become a key desktop resource for successful outsourcing professionals who achieve corporate and personal goals in this field. - There is also a template available. This Template is a Word file; to be used with Microsoft Office 2010 and more recent versions. - This template is only available via Van Haren Publishing! - These Templates are additional material to the VHP publication: ISBN 978 94 018 0536 0 Outsourcing Professional Body Of Knowledge - OPBOK Version 10 - Templates

Although outsourcing has been a common business practice for only the past two decades, its use has changed how businesses look at managing their functions. It is a new management practice and a profession and has created an economic market estimated at $3 Trillion globally. It provides employment to over 14 million people worldwide and has transformed some of the nations’ economies. Yet, as a profession it is still in a growing stage and management practices are still being defined and deployed.

1.1 Standards

1.0	Defining and Communicating Outsourcing as a Management Practice
1.1	Ability to define outsourcing in terms that are easily understood by individuals at all levels of the organization and by outside stakeholders, including shareholders and the public at-large. This includes:
1.1.1	Identifying business models and change agendas that will end up driving a decision for a change in the business model (e.g., focusing resources on specific functions)
1.1.2	A working definition of outsourcing that is consistent with generally accepted concepts and meanings as commonly used by professionals within the field
1.1.3	Establishing definitions of common outsourcing terms such as BPO, ITO, Rural, Offshore, Near Shore, 1st generation, 2nd generation, 3rd generation deals (transactional, transitional and transformational) and provide differentiation between outsourcing, offshoring, shared services, and out-tasking via private services, XaaS, and Cloud Computing
1.1.4	A framework for comparing and contrasting outsourcing vs. other forms of sourcing outside business relationships, such as, suppliers, contractors, temporary, staff augmentation, strategic alliances, and joint ventures. Characteristics to be considered include: costs, benefits, risks, and advantages
1.1.5	Identifying and understanding recent developments that may/will impact outsourcing and define terms such as Cloud Computing, Bundled Sourcing, Rural Sourcing, Consortium Sourcing
1.1.6	Define and understand the concepts of “outsourcing portfolio management” and its impact on sourcing strategies
1.1.7	A working knowledge of all commonly used professional terms as defined in the Outsourcing Professional Body of Knowledge (OPBOK)
1.2	Ability to identify market potential, and availability of services including utilizing market knowledge:
1.2.1	Identify market size and economic impact of outsourcing on business
1.2.2	Ability to identify viability and applicability of alternatives solutions such as those listed in 1.13
1.3	Ability to define the business drivers, timeframes, and commonly anticipated benefits of outsourcing in terms that are easily understood at all levels of the organization and by outside stakeholders, including the public at-large. This includes:
1.3.1	External business drivers, such as, competition, globalization, technology, regulation and deregulation, economic, political and others
1.3.2	Internal business drivers such as process improvement, competition for resources, competition for capital, core versus non-core considerations, and mission criticality
1.3.3	Common benefits, including: cost savings (direct, indirect, cost avoidance), improved focus, more variable cost structure, access to skills not available to the organization internally, reduced capital requirements, improved management focus, innovation, and speed to market
1.3.4	Timeframes for realizing these benefits based on market conditions and the organization’s business plans and capabilities
1.4	Ability to identify and develop organizational solutions to address the business drivers and provide clear differentiation between outsourcing and creating an inter/intra organizational solution (such as shared services):
1.4.1	Clearly identify similarities and differences between shared services, outsourcing and hybrid (between shared and outsourced) services, and a Build Operate Transfer model
1.4.2	Provide management guidance on the benefits / shortcomings and risks of outsourcing and/or shared services
1.5	Ability to identify the common challenges that impede organizational success with outsourcing, including:
1.5.1	Setting realistic expectations; choosing the opportunities for outsourcing; choosing the most qualified providers; crafting a balanced relationship; properly managing outsourcing’s organizational impacts; managing the ongoing relationship - including disengagement
1.5.2	Identifying internal barriers to outsourcing: fear of loss of control; activities and processes being seen as too critical to be outsourced; perceived loss of flexibility; negative customer, employee, community reactions; dependence on vendor due to loss of skilled resources
1.5.3	Identifying behavioral and organizational issues that may occur during the transition to an outsourced operation. Identify risks in transferring employees as well as the impact on retained employees
1.5.4	Identifying regulatory restrictions on outsourcing
1.6	Understand the unique challenges and opportunities associated with the strategic sourcing of business processes including innovation, multi-generation deals, technology changes, mobile and virtual workforce, data mining, retained organization development, and governance
1.7	Ability to define the role that a professional of the Certified Outsourcing Professional Family plays in achieving intended organizational outcomes through outsourcing. This includes:
1.7.1	Strategic, management and/or outsourcing topical and Subject Matter Expert skills
1.7.2	Ability to interpret and apply The Code of Ethics and Business Practices for Outsourcing Professionals (Appendix E)
1.7.3	Ability to benefit from and contribute to the industry-wide body of knowledge through participation in the work of applicable professional associations
1.8	Ability to map the structure and operational components of an organization to a common business process framework using a standard model such as that defined in the Outsourcing Professional Body of Knowledge (OPBOK), including:
1.8.1	Providing an organizational process map and developing a custom model for a specific organization with process and activity interdependences
1.8.2	Mapping an organization’s value-chain and support services
1.8.3	Classifying current and emerging forms of outsourcing, including activity, functional, process levels as well as bundled services
1.8.4	Comparing and contrasting the measurable benefits that organizations are realizing through each form of outsourcing within each structural area of the business
1.9	Ability to understand and create a framework for strategic sourcing outside an organization’s home country and relevant considerations:
1.9.1	Offshore destination selection criteria and application
1.9.2	Appropriateness of location for various forms of offshoring (BPO, ITO, LPO, KPO, etc)
1.9.3	Models for offshoring (captive centers, build-operate-transfer, full-time, part-time, home-based, etc.)

Table 1.1: Standards for defining and communicating outsourcing

1.2 What is Outsourcing?

Outsourcing is a long-term, results-oriented business relationship with a specialized services provider. The services contracted for (including manufacturing services) may encompass a single activity, a set of activities, or an entire end-to-end business process. In most cases, and especially for larger organizations, what’s being outsourced was previously performed by the customer organization for itself and is being transferred to the provider. In other cases, however, these may be activities the customer organization never performed for itself.

The use of the term, ‘long-term’ does not necessarily imply a contract of a fixed length. Althou...

Table of contents

• Cover
• Titel
• Colophon
• Copyright and use statement
• Preface and purpose of this guide
• Contents
• Index of figures
• What has changed in Version 10
• 1 Defining and communicating outsourcing as a management practice
• 2 Developing and managing an organization’s end-to-end process for outsourcing
• 3 Integrating outsourcing into an organization’s business strategy and operations
• 4 Creating, leading and sustaining high-performance outsourcing project teams
• 5 Developing and communicating outsourcing business requirements
• 6 Selecting outsourcing service providers
• 7 Developing the outsourcing financial case and pricing
• 8 Contracting and negotiating for outsourcing
• 9 Managing the transition to an outsourced environment
• 10 Outsourcing governance
• Appendix A Glossary of outsourcing terms
• Appendix B Templates
• Appendix C The common business process framework
• Appendix D Outsourcing professional skills
• Appendix E Code of ethical and business practice standards for outsourcing professionals
• Appendix F Common contract terms and general guidelines for application
• Appendix G The Global Outsourcing 100® and the World’s Best Outsourcing Advisors
• Appendix H Reference article on governance
• Appendix I Applicable rules and regulations (current as of 2012)
• Appendix J eSCM-CL comparison with OPBOK standards
• Appendix K eSCM-SP comparison with OPBOK standards