Outsourcing

May 2001

Building in-house capacity vs. outsourcing

Web publishing should belong to the core competencies of every organization. Outsourcing should only be considered once a clear vision, knowledge and procedures are inplace. Therefore, institutional capacity building is of great importance. With this knowledge at hand, an organization can greatly enhance the efficiency of the outsourcing process as well as reduce the danger of becoming dependent on subcontractors.

When should outsourcing be considered?

1. Outsourcing should be used as a tool to handle work hikes. In other words, core or ongoing Web publishing activities should be taken care of by staff within the organization, and only additional work should be subcontracted.

2. Activities that do not belong to the core competency of an organization should be outsourced, such as programming or graphic/art design.

Who should be the preferred subcontractor?

To make the subcontracting process easier as well as reduce the administrative overhead, there should be a limited number of preferred subcontractors. These freelancers can build up knowledge about your organization, as well as make your task easier through an established business relationship. Each organization should keep a list of subcontractors. If the value of a subcontract exceeds a certain limit, competitive bids should be requested.

What kinds of tasks should be subcontracted?

Almost all tasks related to Web publishing can be outsourced: those related to content preparation (e.g., advising, proofreading and copyediting, translation), technical implementation (e.g., HTML editing, graphic design, database and other programming), as well as follow-up tasks (e.g., feedback surveys, maintenance).

Position of subcontractor in the Web publishing team

To increase the efficiency of the subcontracting process as well as to build an established business relationship, the subcontractor should be involved in the work of the Web team as much as possible. In other words, a subcontractor should not just be a person sitting "at the end of the pipe", but an integral part of a team. To this end, it would make sense to invite the subcontractor to team meetings.

Ownership of copyright

When a contract is drafted for an outsourced work, the issue of intellectual property rights should be addressed. The contract should clearly state these conditions.

Financing subcontractors

The costs of subcontractors usually show up as "direct costs" in the project budget, and therefore the financial implications will be different than with in-house staff, whose work is administered by "workday charge" or "direct salary buyout." The financial conditions of subcontracting work may depend on the donor's requirements, on the conditions of the subcontract (e.g., charging based on time or on output) as well as the accounting procedures (e.g., overhead on direct costs, tax regulations, invoicing, cashflow situation, type of reimbursement (cash, in-kind, or both) etc.).