In fleet management, where the global trend to outsourcing has been particularly marked, cost will always be a big factor in the decision to outsource, says Laurence Savage, MD of Avis Fleet Services.

This is especially so for small to mid-size companies which can spend up to five times as much on back-office activities as a percentage of their revenue, compared to big companies he says.

However, Savage says focusing on cost savings is short-sighted, as initial savings are usually not repeated and may result in inferior service in the long run.

"In selecting a service provider you are entering into a long-term business relationship and you need to weigh up all the factors."

Among a number of key points to consider are whether the culture of an organisation fits that of the service provider.

"It is vital that you are able to work well with these people and that they identify with you and your company. Staff complement and their location must be investigated and their level of expertise and availability should form part of the service agreement. Ensure that on both sides a senior executive is responsible for managing the relationship."

The availability of electronic and management information systems is also important. The outsourcing company should be able to supply a high level of readily accessible management information, says Savage.

André Michua, MD of Afroteq Facilities Management, says that almost all medium to large companies are now outsourcing.

He says 70% of local companies have started outsourcing in the past four years. Of these, 75% or more say that outsourcing has improved their focus on core business, is an effective way to bring in new expertise, has helped with future planning and has delivered what was promised.

Business Day