Decision Making for Outsourcing and Privatization of Vehicle and Equipment Fleet Maintenance (2011)

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46 A P P E N D I X A Summary of Outsourcing Model and Process Steps

5.1 Organize and Review Outsourcing Decisions 5.2 Assess Implementation Issues 4.2 Do Costs Strongly Favor Insourcing? Outsource Insource 4.5 Validate Cost Trade-Off Analysis 4.1 Satisfactory Insourcing Options? 4.4 Do Costs Strongly Favor Outsourcing? 4.3 Satisfactory Outsourcing Options? Possible Strategic & Market Options Insource Inclination Outsource Inclination 3.1 Identify Appropriate Service Providers 3.2 Capable Service Providers Exist? 2.1 Assess Capability Against Demand 2.2 Can Capability be Adjusted to Meet Demand? Go to Process 4.3 Go to Process 4.1 Outsource Inclination Insource Inclination 1.1 Select Potential Outsourcing Candidates 1.3 Determine if Candidates Are Mission Critical 1.4 Determine External Competing Market Conditions 1.2 Identify Legal and Policy Drivers 1.5 Organize Outsourcing Candidates Insource Yes No Yes No No Yes Y e s N o Yes Yes No Yes Yes No A.1. Overview of the Process Model

48 Processes and Subprocesses Inputs Decision or Outputs Process 1 – Identify Critical Internal and External Conditions 1.1 – Select Potential Outsourcing Candidates Observed operational issues with fleet maintenance or directives • An initial list of outsourcing targets 1.2 – Identify Legal and Policy Drivers Legislative and policy information relevant to outsourcing • Assertion that the outsourcing is generally supported by relevant legislative and policy extant 1.3 – Determine If the Candidates Are Mission Critical Organization’s strategic business framework • Insourcing decision if the candidates are viewed as core or mission critical • Confirmation on further outsourcing analysis 1.4 – Determine External Competing Market Conditions General high-level information about external service market • Insourcing decision if external market is not available • Confirmation on further outsourcing analysis 1.5 – Organize Outsourcing Candidates An analyzed initial list of outsourcing targets • A list of outsourcing candidates for further analysis Process 2 – Analyze Internal Demand and Capabilities 2.1 – Assess Capability Against Demand Demand for maintenance, current staffing levels, current staff and shop capabilities • Assessment of the maintenance shop capabilities relative to current service levels 2.2 – Can Capability Be Adjusted to Meet Demand? Options to balance the gap between demand and current capabilities • Initial assessment of inclination toward insourcing or outsourcing Process 3 – Evaluate External Service Providers 3.1 – Identify Needed Service Providers Potential types of maintenance services to be outsourced • An initial list of external service providers available in the region 3.2 – Determine If Capable Service Providers Exist Data items to collect from the external service providers • Data back from service providers regarding their capabilities Process 4 – Analyze Cost and Performance Trade-Offs 4.1 – Determine If Insourcing Options Are Acceptable • In-house service quality benchmark • Current in-house service quality level • Insourcing still viable and proceed to cost analysis • In-house service quality not acceptable and determine if outsourcing options are satisfactory 4.2 – Determine Whether Costs Strongly Favor Insourcing • In-house and external service cost data • Preference on insourcing • Insourcing decisions • Strategic and market options A.2. Summary of Outsourcing Process Steps

Processes and Subprocesses Inputs Decision or Outputs 4.3 – Determine If Outsourcing Options Are Acceptable • External service quality benchmark • External service capabilities • External service provider performance • Outsourcing still viable and proceed to cost analysis • External service quality not acceptable and conduct cost-performance trade-off 4.4 – Determine If Costs Strongly Favor Outsourcing • In-house and external service cost data • Preference on outsourcing • Outsourcing decisions • Strategic and market options 4.5 – Validate Cost and Performance Trade-Off Analysis • Cost comparison: in-house vs. external • Service quality comparison: in- house vs. external • Insourcing decisions • Outsourcing decisions • Strategic and market options Process 5 – Synthesize and Finalize Outsourcing Decisions 5.1 – Review and Organize Insourcing and Outsourcing Decisions • Insourcing decisions • Outsourcing decisions • Organized insourcing and outsourcing decisions 5.2 – Assess Implementation Issues • Insourcing decisions • Outosurcing decisions • Internal improvement strategies • Organizational readiness 49