Development of an Assessment-Tool for Procurement Business Process Outsourcing

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1 Economy Mathias Trojahn Development of an Assessment-Tool for Procurement Business Process Outsourcing Diploma Thesis

3 Diploma Thesis Development of an Assessment-Tool for Procurement Business Process Outsourcing Submitted by: Mathias Trojahn Submission date: August 14 th, 2006 Supervisor: Prof. Dr. Petra Strauch, Stralsund University of Applied Sciences

4 German abstract German abstract Diese Diplomarbeit wurde im Rahmen des gedas Projektes Road to Growth geschrieben. Ziel des Projektes war die Entwicklung eines Intelligent Sourcing Consulting Framework um die Vorteile von Standorten im Ausland wirksam einzusetzen und somit die wirtschaftliche Entwicklung der Unternehmen voranzutreiben. Der Projektplan beinhaltete die Entwicklung eines Consulting Tools zur Bewertung der Prozesse hinsichtlich der Beschaffung, des Personalwesens, des Rechnungs- und Finanzwesens und des Applikationsmanagement beim Kunden. Gegenstand dieser Arbeit war die Entwicklung eines Consulting Tools für Beschaffungsprozesse. Neben dem Tool wurden ein Leistungsangebot zur Nutzung der gedas für ihre Kunden und eine Dokumentation erstellt. Das gesamte Tool umfasst einen Fragebogen, ein Benchmarking-Tool, ein Auswertungsmodell, ein Tool zur Auswahl des passenden Standortes und ein Investmentmodell. Die Entwicklung der beiden zuletzt genannten Bestandteile war jedoch nicht Teil dieser Diplomarbeit. Im Anschluss an die Entwicklung folgte eine Fallstudie zur Prüfung und Verifizierung des Tools. Diverse Szenarien wurden getestet und somit die Funktionalität und die Anwendbarkeit des Tools bestätigt. Die Vorgaben des Projektes wurden in dieser Arbeit erfolgreich realisiert. iii

5 Acknowledgment Acknowledgment First I would like to thank my parents for supporting me whenever I required it. Therefore they deserve my special thanks. Second I would thank my kinship and my friends who take the time to encourage me to keep on working during the hard time. Then I would like to express my thanks to Juanito Dovi Parbey who gave me the opportunity to write my diploma thesis at gedas and who supported me with useful comments and suggestions. Last but not least my thanks go to Road to Growth project team at gedas. It was a pleasure to work with you. iv

6 Dedication Dedication I dedicate this diploma thesis to my brother Marcus who died in a car accident on May 29th, 2006 at the age of 21. He was not only my brother he was my best friend too. Thank you for the great time. v

7 Contents Contents 1 Introduction Motivation Objectives and scope Outline of the document Terminology Consulting Outsourcing Types of outsourcing IT-outsourcing Business process outsourcing Intelligent sourcing location terminology Offshoring Nearshoring Onshoring Outsourcing models Full business process outsourcing Shared service center Joint venture Procurement business process outsourcing Why outsource procurement functions? Market trends What can be outsourced? Locations Examples for procurement BPO Presentation of the IT service company gedas AG About the company History Organization of the company Service portfolio Development of a business process outsourcing assessment tool Development of the procurement BPO assessment tool Questionnaire...45 vi

8 Contents general IT Strategy Office equipment/services/it-licences Visualization Benchmarking tool Procurement costs Scoring model Help Summary Glossary Location assessment tool Investment tool Service offering portfolio Assessment tool documentation Integration within existing consulting framework Case study Approach Case companies Results Conclusions of case results Summary, conclusion and outlook Summary Conclusion Bibliography...82 vii

9 List of figures List of figures Figure 1: The outsourcing term...4 Figure 2: Outsourcing overview...10 Figure 3: Offshore accelerators and inhibitors...13 Figure 4: Country specialization by niche...13 Figure 5: Offshoring advantages and disadvantages...15 Figure 6: Nearshoring advantages and disadvantages...16 Figure 7: Onshoring advantages and disadvantages...17 Figure 8: Outsourcing model overview...18 Figure 9: The BPO outsourcing model...19 Figure 10: Shared service center outsourcing model...21 Figure 11: Joint venture outsourcing model...23 Figure 12: Outsourcing market...27 Figure 13: Current and future use of a procurement service provider by industry...28 Figure 14: Current and future use of direct and indirect materials/services29 Figure 15: gedas locations...35 Figure 16: gedas Group revenues...36 Figure 17: gedas Group staff...36 Figure 18: gedas Group profit before taxes, return on sales and return on investment...37 Figure 19: gedas group matrix organizsation...39 Figure 20: gedas markets& services: consulting along the entire valueadded chain...40 Figure 21: gedas Intelligent Transformation...41 Figure 22: Example general information...46 Figure 23: Example assessment information...46 Figure 24: Example general procurement information...47 Figure 25: Example financial information...47 Figure 26: Example other information...48 Figure 27: Example IT information...48 Figure 28: Example IT-costs...49 Figure 29: Example strategy information...49 Figure 30: Example current outsourcing activities...50 Figure 31: Example primary drivers and drawbacks...51 Figure 32: Example procured materials...52 VIII

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