Co-Sourcing:
New methods of outsourcing are today redefining the way of working. One such way is co-sourcing which is an investment relationship marked by shared objectives, shared risks and shared rewards between two companies, one of which is a service provider. Specifically, the service provider would have to help restructure the company and be willing to make new investments, while driving out costs from the co-sourcing company’s existing ways workings
According to a joint case study by Accenture and Thomas Cook, the co-sourcing agreement between Accenture and Thomas Cook, UK and Ireland has helped Thomas Cook to improve operations and reduce costs. The study notes that due to the alliance, Thomas Cook has been able to save £140 million ($243.72 million) in 16 months. The more recent expansion of services at Accenture’s delivery centre capabilities has resulted in an additional 30% savings. The study notes that under a 10-year arrangement, Accenture transitioned approximately 60% of the shared services workload, including functional areas such as application management, accounting operations, payroll help desk and training administration, to its delivery centre in Bangalore. The remaining shared services resources focused on more strategic activities, including IT operations, reporting and payroll processing. The term was able to migrate the majority of the work in six months, and completed the transition in 11 months with all transition goals met on time and on budget.
Accenture had initially collaborated with Thomas Cook UK and Ireland to share a 10-year co-sourcing arrangement. The main component of this agreement was a cost-effective shared services centre co-located in Peterborough, United Kingdom. Accenture and Thomas Cook designed the shared services centre to be a multi-process centre covering all the services under one roof. According to Carl Dawson, Thomas Cook UK and Ireland’s IT director, “We knew that co-sourcing would enable us to create a single administrative focus, with a single set of information systems under the management of experts. In addition, the arrangement would free Thomas Cook UK from non-strategic functions, allowing it to propel its business forward.” To support the shared services model, Accenture transferred nearly 400 Thomas Cook employees to Accenture.
Accenture also collaborated with Thomas Cook to develop a single, integrated SAP platform for the entire business. Given the cost savings and other benefits, co-sourcing can well be the new model for outsourcing allowing both parties to retain stake.
CAclubindia
