Subcontracting as a Solution not a Problem in Outsourcing.

Potential savings may be achieved by the use of outsourcing, especially in the ADP area. However, in order to achieve those savings, considerable forethought needs to be taken in structuring the contract, in monitoring the contractors performance, and in the administration and oversight of the contract. One of the ways that one could achieve additional savings through outsourcings would be to select the subcontractors for specific areas of expertise. However, care needs to be taken in doing this, for there are both additional costs and time requirements involved with overseeing subcontractor performance. In addition, in order to mitigate some of the potential risks that have caused previous outsourcing efforts to fail, there are a number of measures that one can include in the contract to aid in meeting the goals and costs projected for the outsourcing such as the use of performance criteria, and comparability measurements.