Organizations that have chosen to work towards leading practice back office operations need to start by making a key decision about how to source services: either by setting up an internal Shared Services operation (“make”) or by purchasing the same services from a third party via outsourcing (“buy”). There are various drivers that support one model over the other, or that work in favour of “hybrid” combination of both. This article evaluates the pros and cons of each, and helps you decide on the most appropriate model based on the existing structure, needs and requirements of your organization.

1. 1 | APRIL 2015 - THE MAKE OR BUY DECISION
2015
APRIL
The Make or Buy Decision
Phil Searle, Founder & CEO of Chazey Partners, discusses Shared Services and
Outsourcing and how to make the right decision regarding a services delivery
model

2. 2 | APRIL 2015 - THE MAKE OR BUY DECISION
Internal Shared Services Business Process Outsourcing
Existing processes Not yet standardized, minimal
automation, complex, distributed,
immature controls
Already standardised, automated,
centralized, in a stable control
environment
Skilled labor Lack of skilled labour in areas
where BPO potentially located
BPO provider has expertise
Time Zone/Language Just-in-time service and local
dialects requirement of service
Time zone, accents and language
not a significant factor
Term BPO provider’s minimum term is
too restrictive and future plans
BPO providers and minimum term
does not restrict future plans
Volume Too small to demand significant
BPO provider of attention
Significant enough to be a major
client of BPO provider
Process Re-Engineering Only portion of process in scope,
reducing ability to re-engineer
end-to-end & improve
Portion included in-scope
does not hamper potential re-
engineering
BPO Provider Reputation Potential BPO has insufficient
reputation and robustness
BPO is a reputable and robust
BPO Location Risks Political & other risks significant Risks mitigated, including disaster
recovery considerations
Flexibility BPO requires fixed volume
commitment
BPO can flex up/down in volume,
scope & complexity
Communication Risks around access, security,
confidentiality & associated costs
Ability to mitigate communication
risks

3. 3 | APRIL 2015 - THE MAKE OR BUY DECISION

4. 4 | APRIL 2015 - THE MAKE OR BUY DECISION

5. 5 | APRIL 2015 - THE MAKE OR BUY DECISION
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6. 6 | APRIL 2015 - THE MAKE OR BUY DECISION
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7. 7 | APRIL 2015 - THE MAKE OR BUY DECISION
ChazeyPartners
www.ChazeyPartnersinc.com. LinkedIn, Twitter, Facebook Google+
Rob Serjeant Managing Director, Asia-Pacific
Chazey Partners
robserjeant@chazeypartners.com