Last week, as we wrapped up The 2019 OPEN MINDS Executive Leadership Retreat in Gettysburg, I was struck by the many challenges that health and human service organization executive teams face in building the organizational size and scale needed for success. Most often, the discussion focuses on getting more “revenue”—almost all discussions of scale are posed in terms of revenue. But to make that revenue growth happen, there is also the parallel challenge of building the administrative infrastructure needed to support the scale—human resources, financial, marketing, technology, regulatory compliance, and more.
One option in a high-change, high-growth environment is for those executive teams to consider using outsourcing to build capacity in non-core service areas, allowing them to focus on building more service revenue. How to consider the outsourcing option and make it happen was the focus of Hope Winkowski, Vice President of Product Services at Credible Behavioral Health Software, in her presentation Opting To Outsource: An Executive’s Guide To Identifying, Selecting & Managing A Vendor For Outsourced Services.
First, provider organization executive teams need teed to consider the pros and cons to ooutsourcing. Positives include cost saving opportunities, better efficiency, greater operations transparency, an easy way to “adopt” best practices, and keeping organizational focus on core competencies. But there are a few downsides that need to be kept in mind. There is the issue of control and customization. And, there can be liability issues (which party is “responsible” when something goes wrong) and likely higher costs.
What should you look for when outsourcing services and how do you make your decision? Ms. Winkowski recommends using a request-for-proposal (RFP) process. The RFP should include expected performance metrics, clarify any shared risk, establish communication expectations, and establish criteria for terminating the outsourcing relationship. The RFP process—the response, presentations, and negotiations—will provide an opportunity to negotiate costs, confirm all service delivery assumptions, and provide insights into the vendors’ processes.
Outsourcing is a potential tool for rapid growth and achieving operational scale. Executive teams should consider the many outsourcing options as part of their strategic growth plans. For more on outsourcing and vendor selection, check out these resources from The OPEN MINDS Industry Library:
- Yes, Outsourcing
- The Cost Of ‘Competencies’
- A Revenue Cycle Management Primer
- A Chaotic Environment Demands Fluid Strategic Planning
- Human Resources: The Outsourcing Advantage
- Thinking About Partnering With A Tech Start-Up?
- Your Insights For Tech Management & Strategy
- 3 Keys To Building A Strategy For Growth
- Building Your Foundation & Your Castle
- What Should Your Organization Be Spending On Tech?
And for more on vendor selection, join Matthew M. Dorman, Founder and Chief Executive Officer, Credible Behavioral Health Software and Larry Trenga, Vice President, IT, Wesley Family Services on October 29 for their session, “Is Your EHR On Track? How To Conduct A Strategic Technology Assessment”, at The 2019 OPEN MINDS Technology & Informatics Institute.