Effectively managing the outsourcing relationship

Outsourcing relationship management - Wikipedia

effectively managing the outsourcing relationship

Another point is to treat the relationship in as structured a manner as possible. Be aware that you are effectively managing the supply and demand of a business. A good relationship between the client and the outsourcing provider is essential for the success of the project. Relationships can be effectively managed with. Outsourcing relationship management (ORM) is the business discipline widely adopted by University developed a Sourcing Capability Model to measure the maturity and skills required for effective outsourcing relationship management.

Issues in your outsourcing relationship can arise from something as seemingly trivial as a personality clash to those resulting from miscommunication or lingering constraints of the original procurement process — contractual issues or poorly considered KPIs, to name but two.

In our experience of dealing with hundreds of these situations, we have found that it is often the case that though you may believe a relationship has fallen into the abyss and is at its darkest point, it would be extremely unusual for it to be completely irrecoverable. The above said, relationship managementcontract management and strategies for building commercial trust should never be considered an afterthought.

They should be built into the very foundations of your delivery programme, written contract, governance and budget.

effectively managing the outsourcing relationship

If you have the right ICF Intelligent Client Function team in place, they should be generating a four to eight times return on the investment you put into them. There are some key steps you can undertake that we have found to be highly effective for driving ongoing value in complex outsourced relationships.

Your relationships should benefit from the years of experience you have to offer and the learnings you have acquired along the way.

effectively managing the outsourcing relationship

Keep communication lines open and ensure that business and relationship goals are clearly and regularly conveyed. Help both your internal team and your outsourced parties to keep abreast of the changing goals and objectives your organisation is facing. Communicate what your organisation is doing to align itself to the new challenges —what its values are and what others now expect of it — and how all this translates to the goals of the delivery objectives you are working on together.

On the other side, when matters are not going to plan, it should also mandate how often progress meetings should take place, how to handle disputes and so forth — a roadmap to how the relationship can achieve best value for all parties.

Top 10 Client Relationship Management Tips

Create and share your plan of action. Once it is agreed, let everyone have a copy.

effectively managing the outsourcing relationship

In most cases, it goes without saying that the documentation that goes to make up the written record of expectations and responsibilities under best practices in relationship and contractual management should be safely stored in a secure and organised facility and regularly updated with current versions. However, even today, we still find organisations that are unable to find signed copies of contract terms, schedules and change variation notices.

Wheedle out and eradicate any ambiguity. Lack of clarity in verbal, written or contractual communications can send parties off on completely the wrong track. The parties spent the first few weeks after the outage pointing fingers, with the buyer touting the provider's contractual responsibility for uptime, and the provider waving all of the reports they had previously sent to the customer, saying they were paying for much less service than they needed based on the criticality of their systems.

Ultimately, the company's CFO and an SVP from the provider found a way out by settling on five key shared goals related to improving the company's availability and disaster recovery position, and putting in place new technology to enable greater flexibility.

effectively managing the outsourcing relationship

Much like having a common enemy can unite people, providing a common challenge, whereby everyone seeks the same outcomes, enabled the leaders to harness the personal commitment of their teams to move the relationship forward in a constructive direction. Identifying shared goals for which all are held accountable at the outset of the deal helps to build more of a "joint delivery team" mindset, which in turn helps enable collaboration from the start.

Measure both parties The leaders in the example above also knew that one-sided service level agreements SLAs weren't going to cut it to get their team moving forward. After all, treating service levels as something only the provider needs to worry about tends to exacerbate an "us vs.

Many experienced buyers of outsourcing services have begun to learn all of the ways that their organization contributes to or detracts from the value created in their outsourcing arrangements.

Outsourcing Relationship Management: It’s Not Business - It’s Personal - Spend Matters

For example, they know that their ability to transfer knowledge effectively and enable teaming across geographies is critical to achieving savings in an offshore deal. Establishing some bilateral metrics helps keep both parties focused on the things they can do to enable the other's success, engendering better collaboration. Discuss contribution, rather than blame In many outsourcing relationships, when the inevitable challenges arise, meetings to talk about "how we got here" usually devolve into meetings about who is at fault.

These conversations are a surefire way to waste time and lead to more of the same problems. Instead, try a simple reframing -- call it a "What can we do to keep this from happening again?

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Task each side with generating ideas about what they can do going forward to lead to better results. This is not about "blaming the victim" -- it's about problem solving, empowering each side. It shows our teams -- who take their work personally -- that they can take action to make things better; they are not prisoners to their counterparts.