Outsourcing - Agreement definition
Provisions of the agreement, reflect the terms of cooperation with the service provider, and they should start with a determination of the range of issues that will be included in the final contract. Among the basic points managers should consider those which are applied universally, regardless of the type of outsourced tasks, as well as other, characteristic of the types of tasks entrusted to the provider. Agreeing terms of cooperation requires adequate preparation on both sides. In outsourcing customer situation fundamentally different from the situation when the same range of services is carried out by the internal units.
Such situation does not require to specify in detail the obligations of the parties, and to ensure the implementation of the secondary responsibilities. The division of tasks, and relationship between cooperating internal units are subject to framework of the organizational structure.
The agreement with the service provider should take into account basic assumptions about the development of cooperation with external entities. On this basis basic purpose of contract in outsourcing, are:
- double-sided understanding of mutual expectations, powers and obligations of the parties,
- the agreed balance of powers of the parties, and the burden of the obligations
- adjustment of ways of doing things to meet the needs of the service provider and the customer,
- reduced risk of non-compliance or improper realization of the outsourced tasks
- double-sided involvement in the improvement of the implementation of outsourced services,
- the involvement of parties in adaptation to new operating conditions in emergency situations,
- regulate the rules of conduct in emergency situations (e.g. in conflict)
- compensation for losses related to undue execution of assigned tasks.
In addition, consideration should be given to the possibility of varying the weight of the specific objectives, depending on the characteristics and range of outsourced tasks.
- Quinn, J. B., & Hilmer, F. G. (1994). Strategic outsourcing. Sloan management review, 35(4), 43.