Do your outsourcing arrangements deliver the value your organization needs and expects?
The answer to that question can depend in large part on how you manage your provider relationships. In fact, effective relationship management is often what sets apart those deals that disappoint from those that deliver real value.
Getting Off on the Right Foot
The problems of most outsourcing deals tie back directly to how those deals were negotiated and transitioned — assumptions made on both sides, perceptions and expectations created during the process, commitments left unclear, and relationships damaged by difficult tactics. The parties then rush to “go live” with reluctant business units, thinly developed governance mechanisms, and little alignment regarding what will make the relationship a success for all involved.
Building Skills to Enable Effective Delivery
While committee structures and process maps are important components of outsourcing governance, they are not enough to ensure success. Retained organizations need more than just subject matter expertise; as outsourced functions move from managing staff who deliver services to managing third party relationships, they require additional skills. In order to engage in productive conversations about scope, performance, and commitments, and to negotiate creatively about projects and timelines, governance teams need to add to their repertoires.
Ensuring Effective Mid-Course Corrections
Over the life of a multi-year arrangement, challenges invariably arise. Goals, strategies, and technology change, leadership turns over, and delivery problems crop up. Even in highly stable relationships stakeholders eventually start to wonder “where do we find innovation or incremental value?” All relationships encounter some challenges and changes; how you deal with those makes all the difference.