Outsourcing Overview Value Driven Engineering Value Driven - - PowerPoint PPT Presentation

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing Overview

• Outsourcing is one available tool in

Mustangs diversified toolkit, but not an all encompassing primary strategy

• Outsourcing will be used when it makes

sense

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Reality

• Downstream, Midstream and Automation

driven by:

• Cost pressure from clients and

competitors to deliver projects at even lower cost

• Upstream and Pipeline driven by:
• Local content

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Reward

• Ability to do more Project
• Potentially lower costs for clients
• New client and market opportunities
• Global recognition, capabilities, synergism

and responsiveness

• Access to greater pool of talent

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Risk

• Potential upset to existing culture
• Morale: Perception of giving away work for

home office

• Quality, performance, reputation,

confidentiality

• Potential loss of expected profit: unplanned
• r hidden costs associated with startup,

travel & living, quality and damage control

• More difficult to act as ‘owner’s engineer’

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Team Development

• Compatible cultures
• Good relationships
• Good communications
• Good team trust

Good team trust

• Aligned of goals

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Project Execution Plans

• Scope split
• Interface plan
• Management of change
• Compatibility of tool
• Organization chart
• Virtual team

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Resource Options

• Must be “Market Facing” and be able to support itself -

winning work on its own in its home market – Company created & owned: can set priorities, define and maintain effective interfaces, maximize alignment and compatibility, share procedures and standards – Company procured & owned: same as above, but must deal with existing company history, issues, methods

• Partnership: lose some control, requires high level of

trust

• Subcontractor (competitively bid each project): low

capital investment, high risk in terms of compatibility, quality, confidentially and project cost, compete for attention and service

MUSTANG Value Driven Engineering Value Driven Engineering

Outsourcing: Summary

• Good option when it makes sense
• Use it to develop more work
• Use it to feed virtual teams worldwide
• Takes good planning