Hi I'm John Walters, partner and the head of the Commercial & IT department. Sub contracting arrangements are now a normal part of modern business life, and can help improve your business' bottom line. Whilst there are clear benefits there are also risks and staying in control of the relationship and protecting your own business and customers is essential. Before launching into any new arrangement its worth giving me a quick call, you may be glad you did.
Outsourcing, at its simplest, is having a particular function of your business taken over and performed by a third party service provider. It could be a peripheral function, such as cleaning and hygiene services, or it could be a core function such as the provision of IT or other strategic services, without which the business would grind to a halt. The outside provider commits to make efficiency savings and improve function performance, whilst reducing your costs. They make profit from their organisation’s purchasing power and efficiencies of scale.
If it sounds too good to be true, unless you have proper contractual protection, it may well be so. Outsourcing agreements can be riddled with “get-outs” for the service provider and frequently enable them to reduce or cease performance, and to increase their charges beyond the realms of what would reasonably be expected. Transparency (both financial and in actual performance) is paramount.
The ancillary documentation is as important as the main contract. By putting in place a proper service level agreement with measurable key performance indicators, and with remedies which bite, you can control your provider to make sure that the job is done properly, on time, and on budget.
As this type of arrangement inevitably impacts upon the staff of both parties, we work hand in hand with our experienced employment team to help you deal with the regulatory issues and duties imposed by the Transfer of Undertakings legislation, and to contractually allocate the related responsibilities and financial burdens between the parties, both on entering into and upon exiting from an outsourcing arrangement.
We can help you through the outsourcing process from advising on tendering arrangements (including on public procurement regulations and procedures where applicable) through to negotiating the outsourcing agreement and ancillary documentation, and have substantial experience of advising public and private bodies on such arrangements.
We also advise clients specialising in providing outsourcing services in the areas of IT and telecommunications, print and office systems, and hygiene services to the private and public sectors, and can help service providers find the contractual flexibility to ensure profitability in such arrangements.
One of the most common forms of outsourcing arrangement across the globe is the outsourcing of logistics services, which is of interest to any business which deals with goods that have to be transported, stored, sorted and distributed as part of its business operation. Classic elements include transport arrangements through road haulage, rail transport, air freight and shipping; warehousing and storage; order management, picking and packing; and dispatch. You may outsource the whole process as a part of integrated supply and distribution chain management, or discrete elements, depending on your business needs.
We have particular expertise in advising businesses on putting in place such arrangements in the context of regional, national and international retail; aggregates operations; and waste transport, in both the private and public sector.
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