Reference no: EM132723136

Atkin and Brooks (2015) stated that outsourcing options should be based on the best possible information available to the organization at the time a decision whether to insource or outsource has to be made. If this information is sufficient for understanding needs, then later comparison between options for service delivery can be made on an unbiased basis. Outsourcing should not drive decision-making but should be driven by it. A well-defined baseline for service delivery also supports later comparison between planned and actual performance, enabling the organization to judge the efficacy of its decision-making.

An important starting point is for the organization to adopt a realistic stance with regard to its requirements. It should differentiate between services that are absolutely necessary and those that are desirable or that might, for example, be justifiable or affordable at a later date. For example, a situation could arise where lunchtime catering would be ideally satisfied by a restaurant, but which would require refurbishment of existing space that is either not possible at present or unaffordable from within current budgets. Consideration should therefore be given to any phasing or deferral until a later date when the full scope of a particular service could be delivered.

Question:

Explain the initial considerations of an organization when deciding to outsource services.