... Visual models can be instructive shorthand for those looking for insight into effective outsourcing practices. Some models that have been developed to dissect and instructively illustrate such practices and are described throughout this paper.
EXHIBIT I
Exhibit 1 provides a general model explaining the important components of the privatization process. The outer perimeter of the model describes the primary components necessary to pursue privatization. ...
Political Will
No matter how valid the reasons for privatization, without a compelling political will, it is difficult to initiate a successful privatization effort. ... There needs to be an individual at a high level administratively who has similarly invested political and professional capital in the success of the privatization process. This individual can have a day to day impact on the success of the privatization effort and will use his/her administrative role to ensure the success of that effort.
Cost
Another primary component necessary for privatization is reasonableness of cost. Though not the only reason to consider privatizing, if the cost is not reasonable privatization is not feasible. ... The bottom line is, if there is not a reasonable number of entities available to provide the service considered for privatization, there is no way an agreement can be reached that will ensure an effective delivery of service. ...
Once these initial requirements of privatization have been met, the success of the privatization effort is further determined by factors such as the development of standards, the initiation of an effective bid process, and the effective monitoring of the contract that results from that bid process. ...
EXHIBIT II
Exhibit II provides a model that describes the components necessary to develop an effective contract. ... Without carefully considering the complexities of the privatization process and developing strategies to counteract those complexities, it is difficult to successfully execute an outsourcing plan. ... Feasibility involves the reasonableness of cost but also includes such factors as the political impact of privatization and the effects privatization may have on issues such as employee morale and public confidence. ... The issue of privatization is politically loaded and this must be dealt with at a political level. ... Externally, it is important that the campaign continues to stress the reasons for privatization (cost, efficiency, etc. ... The issues of procurement and contracting are dealt with in the discussion of other models, but the issue of monitoring and the knowledge of legislation and regulations required to effectively monitor and enforce contractual agreements requires more discussion.
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