Top 10 Outsourcing FAQs
- Why should my organisation outsource anything?
- If my organisation outsources, will we be left with a bad service provider for years to come?
- How many activities does my organisation have to outsource?
- My organisation has people in post that would have to be made redundant? Or, outsourcing would create double the costs for my organisation?
- We already outsource technical contracts, such as air conditioning, cleaning, and lift maintenance, why should we outsource anything to Serco?
- What is Serco’s policy on the use of subcontractors?
- Is Serco an American organisation?
- Does Serco operate to internationally recognised standards
- Surely using Serco would increase my costs?
- What should I do next?
1. Why should my organisation outsource anything?
In Serco’s experience, over the past 40 years, we would say there are four main reasons why an organisation would take that initial step to outsource:
i. Concentration of the organisation on it’s main business, or its core functions
ii. The organisation wants a specialist service provider to deliver a particular activity
iii. The organisation wants better visibility of the support services provided to better understand the quality and cost structure involved
iv. The organisation wants to introduce a competitive advantage to its support services and decrease its overheads
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2. If my organisation outsources, could we be left with a bad service provider for years to come?
No. If the contract is organised in the correct manner to reflect the desired service levels and timeframes of the company, then flexibility in the outsourcing model exists for win/win contract conditions for both the client and the contractor.
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3. How many activities does my organisation have to outsource?
There are no limits. The number of activities could start with a single manpower contract or a multi-activity contract. In our experience the more activities which are linked together in a single contract the higher the degree of commonality providing economies of scale and thus potential savings to you the client.
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4. My organisation has people in post who would have to be made redundant otherwise outsourcing would double our costs. Is that correct?
Outsourcing by its nature involves change, and sometimes the end goal requires diminished numbers of staff. Serco always works closely with a potential customer to analyse the full requirement of the new solution. Through continual dialogue a partnership solution which meets the requirements of the organisation and the contractor can be developed.
The most important issue for both the client and the contractor is to have an end goal. A clear solution with unambiguous lines of communication and division of responsibility is required on both sides for outsourcing to work successfully.
Serco has transferred over 15,000 staff into our organisation from the public sector. We fully understand the personnel issues faced at this time and the best methods for overcoming them. We deal with these on a regular basis. Flexibility is needed when handling potential transfers of staff as the welfare of the individual and the quality of any future service needs to be considered carefully.
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5. We already outsource specific services such as air conditioning, cleaning, and lift maintenance. Why should we outsource anything to Serco?
Serco’s success has been built upon the provision of Service Management. In our experience many technical contracts (?) do not provide the level of service the end users require and sometimes these contracts do not make as much financial sense as first envisaged.
Serco’s approach is to combine and deliver only those activities where we can provide high quality, professional services. Where necessary we subcontract certain activities as required to provide the most appropriate solution, running competitions on a regular basis for individual contracts or projects. The success of our Service Management approach has brought significant savings to many customers.
Furthermore, our approach to Change Management ensures that we continually monitor the health of a contract to assess future modifications, whether they are process or technology led. The start-up, or Phase-In, of a contract is the start of a transition programme which will last the length of the contract rather than the only ‘change’ to take place. Thus we are able to create efficiencies savings during the life of the contract or off-set costs against third-party revenue in certain situations.
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6. What is Serco’s policy on the use of subcontractors?
Serco recruits its staff for careers rather than just contracts. We provide annual appraisals and training plans to develop our personnel to enable them to grow with the Company.
Serco only uses subcontractors where it is absolutely necessary and where the use of those subcontractors assists our objective in delivering quality services to our clients. An important aspect to Serco is the fit of the company culture of our partner companies. Serco’s own company culture is one of working to the spirit of the contract rather than just the letter - our staff go the extra distance to deliver customer satisfaction. We look for partners who complement our approach and so the solutions we deliver.
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7. Is Serco an American organisation?
Serco stands for SERvice COmpany and was born out of the Radio Corporation of America (RCA) in 1986 through a management buyout. Serco is global but the parent company, Serco Group plc, is listed on the London Stock Exchange.
The American “can-do” philosophy has stayed within Serco as an important aspect of our culture. Over the past 18 years we have applied our management philosophies successfully to the delivery of IT support services, satellite engineering manpower support, non-core facilities management, call centres, train operations, schools and hospitals.
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8. Does Serco operate to internationally recognised standards?
Yes. Many of our Support Offices and contracts are ISO certified, the majority now ISO 9001:2000. The benefit of the new accreditation and Serco’s use of it is that we use the ISO 9001:2000 system to assist us in creating an environment where we continually look to adapt our service delivery to provide increased client satisfaction.
We also apply IT Infrastructure Library (ITIL) methodology to our technology led service contracts, AQAP standards within the military fields and many other standards depending upon the requirements of our activities. Serco will always work with the client to understand the standards recognised and required to operate a particular contract, ensuring our activities meet the recognised standards on day one of the contract or within agreed timescales.
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9. Surely using Serco would increase my costs?
Not necessarily (No??). Firstly, Serco operates with a very flat structure so our overheads in general are a great deal lower than many of our competitors and not so different from incumbent service prices.
Secondly, our Service Management approach is to continually monitor the cost structure of our contracts to provide improvements to our clients and savings where possible. Our solutions in many cases include innovative approaches which can include the off-setting of costs against third-party revenue. All of which creates an environment for a decreasing cost structure over the length of the contract.
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10. What should I do next?
Contact the Serco Support Office closest to your organisation and invite us to provide your organisation with a presentation of our activities. If you like what you hear then further meetings could establish potential areas for cooperation.
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