A winning outsourcing relationship

* Enter the 2007 Outsourcing Excellence Awards

The Outsourcing Institute, a subsidiary of outsourcing consultancy Everest Group, is now accepting nominations for the 2007 Outsourcing Excellence Awards. Nominations can be made by the buyer or the provider, but must be made by Sept. 30. If you are involved with a great outsourcing relationship, maybe you should throw your situation into the hat.

The awards are given in eight categories:

* Best Partnership

* Best Business Challenge

* Best Offshore

* Best ITO (IT Outsourcing)

* Best BPO (Business Process Outsourcing)

* Best EU (European Union)

* Best Healthcare

* Best Financial Services

Lessons learned from last year's winners include:

* Buyers must have a disaster recovery/business continuity plan in place.

* Offshoring actually saves and creates American jobs.

* Even though it's business, it's also about friendship.

* Suppliers are going the extra mile for their buyers. In outstanding outsourcing relationships, it's not just about the money.

* Outsourcers can meet impossible deadlines.

* Healthy outsourcing relationships have a clear dispute-management process.

So how do you get a winning relationship? Of course, you should start by looking for competence in the functions you plan to outsource. A great relationship will not compensate for lack of skills within the ranks of your outsourcer. Reference checks, certifications, and interacting with the vendor will allow you to get comfortable with their ability to do the work. Then you should focus on your ability to work with the vendor. Understand who will be your main points of contact at the vendor and spend time with them during the sales cycle. Make sure there is a sense of trust and an ownership for the outcomes you expect from the relationship. Also, make sure you feel like they listen to your concerns and suggest positive and flexible solutions. You may be spending a lot of time with some of these people, so you need to enjoy being around them.

As any relationship is a two way street, you need to make sure that the key people in your organization are holding up their end of building this new and important relationship. Be honest and upfront about your issues, priorities and expectations. Create clear specifications for the work to be done and put some serious thought into the needed service levels. Do not hide known problems and hope that they just work themselves out later. You own half of the responsibility to build trust into this relationship right from the start. And while you should not pay too much, don't beat up the deal on price and set your self up for failure later. You will ultimately get what you pay for, and it does not serve your purpose to put the vendor in a loss or very low margin situation. You need them to be motivated and capable of putting their best resources forward to deliver the service levels you require.

Even the best-laid plans require some luck as well. Watch out for these issues developing at your provider:

* Organizational issues within your outsourcer like political game playing or power shifts that make it hard for your guy to get things done on your deal.

* Adjacent "black hole' deals sucking attention and resources away from your deal.

* Cost-cutting programs hindering the staff working on your deal.

* Focusing more on winning the next deal rather than delivering your deal.

* Working with the A-team during the sales cycle and then getting the B-team actually working on your deal.

Not jumping at the chance to nominate your outsourcing relationship? Maybe you're missing some of the key ingredients to a good outsourcing relationship. E-mail me with your good or bad stories.


Copyright © 2006 IDG Communications, Inc.

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