About the Make-Buy-Outsource Question & Interfacing With Third Parties


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The Make-Buy-Outsource question is in many aspects a very interesting one. First of all, there is an evolutional development around the topic. Under normal circumstances, companies will first experience the –- make - decision, in a later stage - buy - and afterwards - outsource. Make-buy-outsource is about acquiring a system that needs to fulfill a specific task in the organization. Outsourcing is broader in the way that not only a system is involved but a whole operation, including other (human) resources.

The MBO-topic is not limited to the larger companies. Any small business is more flexible when it can hand-over tasks to others. For sending out a mailing you can try to setup a template in outlook, but there are many parties on the market that provide more enhanced solutions. The advantage is that you are more flexible and that you do not have to worry about all those extra aspects. Like making backups and providing the right infrastructure. You do need to check out the service level agreement however.

One step further is to hand over all the tasks to a third party. The mailing process is again a good example. You hand over the list (or you can add this list management task to the agreement) and they can execute the job.

A disadvantage is that you are interfacing with a company outside your own. And it is at the level of the interfaces where the problems end:

  • The Mail-partner executed the task but a few addresses bounced. You have the same kind of list stored in your own environment and you should update that list to keep them synchronic. This can happen at either side.
  • The statistical reports you receive from the Mail-partner are sorted on their own key. Then you want not only a paper list but electronic versions to match them or import them into your own database (or data warehouse for larger organizations). Here the same matching occurs which is error prone. Even though solutions like XML have simplified these kinds off tasks, the vulnerability remains.
  • Integration at the front end. A client is calling and you need to access to systems. How do you solve this, swapping screens, or do you integrate client functionality and the front-end?
Every company is to a certain extent unique, but each company faces similar kind of issues according to their main characteristics and according to the situation they are in.

If you are dealing with such a case, setting up the Service Level Agreement (SLA) is very important. A thorough study of all the required interfaces is a prerequisite in getting a sound SLA.

© 2006 Hans Bool

Hans Bool is the founder of Astor White a traditional management consulting company that offers online management advice. Astor Online solves issues in hours what normally would take days. You can apply for a free demo account


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