Ryerson University ITM 707: Strategy, Management and Acquisition Participation Case Building innovation into the outsourcing relationship Sk Sadip Rahman 500852142 Submitted to Professor Bouchaib Bahli Date: November 9th, 2020 Background: Bentley & Brooks (B&B) is one of the world's 10th largest multinational B2C companies, producer of consumer goods focusing on the food and household product sector in the industry. Despite many milestones, B&B is facing obstacles for outsourcing arrangements at operational level yielding the goal of high innovation and continuous improvement. Issues: 1) Lack of CI and innovation 2) No predefined approach to quantify the outsourced service levels achieved 3) Lenient contract condition for suppliers regarding deliverables 4) Weak strategies to ensure proper CI and innovation Analysis: Sourcing Decision Cycle Framework (step-by-step) Make-or-Buy sourcing decision: Resolves whether a company should insource or outsource its goods or services. B&B has a strong offshore and onshore outsourcing for many of its IT services, communications, finance mainly from Europe and HR functions for maintenance mainly from America Selection: B&B makes long term relationships with outsourcing providers in order to bring new innovation and CI on board Contracting: The outsourcing contracts sustain over a long period of time usually 5-10 years, in some cases contracts are subject to extension. Scope: B&B has utilized its max level for outsourcing to maximize innovation and efficiency Outsourcing HQ: A big concern to carefully select how efficiently the service will be received from offshore. Such as Alphacorp, central HQ is in Europe, support centres in Portugal, Tennessee and Chile. Keep as is or change decision: Companies need to weigh the benefits received from outsourcing. B&B has faced issues with Alphacorp regarding new innovations and CI not efficiently coming to the company with many loose contract conditions. Recommendation: For short term benefits B&B should try outsourcing with external companies with revised contract conditions for a small span time leveraging a trial period to improve its CI and innovations. For the long term, B&B should consider a new set of strategies and proper quantity methods to weigh the outcomes including improvised contract conditions for all its existing outsourcing partners.
