Well then, you’ve signed your outsourcing contract. You’ve done your due diligence in selecting the appropriate outsourcing provider for your organisation and the type of work you want done. You’ve structured the deal appropriately and have the appropriate SLAs in place. You think you have everything covered and managed – the deal is done. Think again!
Once you have signed the outsourcing contract that’s just the beginning of a relationship that’s going to require ongoing management and unless time and effort is put into the relationship, unexpected outcomes will happen. No contract or SLA is going to cater for every contingency and be totally airtight. Business can change dramatically. The client organisation and the provider, particularly the people in the leadership roles, must understand fully the nature of the relationship and have enough trust and faith in the fundamental objectives to ensure problems and challenges can be effectively dealt with.
It is a question of values and culture, where the values of one organisation are compatible with and respected by the other organisation. Cultural alignment will ensure that the people and individuals working within one organisation will more easily bond and cooperate with the people in the other organisation.
“Putting aside the commercial considerations, it’s also about understanding and the respect of different cultures especially if the outsourcing project is offshored to a different culture and geographic location,” says Stacey Michelon, VP Sales & Marketing for upcoming Philippine-based outsourcer Taking You Forward, Inc. He goes on to say, “I often refer to a well-read book by Vineet Nayar called ‘Employee First Customer Second’ as people often forget that your real customer service backbone is vested in your employees.”
“What we do differently at Taking You Forward, Inc is that we create a harmonious environment that is conducive to stimulating positive energy, that flows through to an enhanced customer centricity.”
An outsourcing contract based purely on cost, where the client is focused on extracting every dollar they can is unlikely to lead to a successful and mutually beneficial relationship. Organisations operating purely on a cost basis will likely under-invest in doing outsourcing right. Both from the client side as well as the provider. They don’t invest the time or put in place sufficiently skilled or talented people to invest in managing the ongoing relationship, where there’s the tendency for knee-jerk reactions when problems inevitably manifest in the outsourcing arrangement.
Research from EquaTerra shows that the more a company invests on managing a relationship, the greater effectiveness and thus satisfaction that they will have in their outsourcing arrangement. The research highlighted that those who spend more than five per cent a year are happier than those that have spent less. In other words, if an organisation is spending $10 million a year with an outsourcer they should be looking at spending around $500,000 per year in managing it. This money is typically spent on employing a governance team and any third parties required for benchmarking or negotiating contracts.
Companies may tend to forget they are outsourcing the work, however they cannot outsource the responsibility that the work is performed well and to the agree standard. It’s up to them to ensure the outsourcer is doing their job properly.
Many companies fail to understand how the rest of the organisation will be impacted when a particular process or operation is no longer managed internally. Outsourcing your customer service or contact centre functions will impact your marketing and sales teams. And the sort of relationship those internal departments will have with the outsourcing provider. During the transitioning phase it is vital to ensure that these other departments are involved and develop a clear understanding of how the outsourcing project will impact them.
When entering into an outsourcing arrangement, remember that’s just the beginning. To make it work, ensure you invest the time and effort in managing it correctly.
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