By Karl Flinders, ComputerWeekly
3. Not driving for true transparency with your outsourcing partner
"Certain kinds of work involve fairly stable processes, like order fulfillment. But others change over time. Companies may have new application needs in an IT outsourcing relationship or new transactional protocols in a business process outsourcing relationship. In such cases, full transparency between the client company and its service provider is a must."
"Managed well, an outsourcing relationship will affect how each partner works as it learns from the other. Work should move seamlessly across corporate boundaries, with breakdowns quickly identified and fixed. This happens only when operational transparency is hard-wired into the relationship from the outset. Client’s needs evolve."
4. Casting an outsourcing relationship in Stone
"No business stands still today. The breakneck pace of change demands flexibility on the part of companies and their service providers. But outsourcing agreements, too often focused solely on cost control, can lock in behaviors that inhibit the nimbleness a client company needs to maintain true operational excellence over time.
A relentless focus on costs will continue to be part of doing business for the foreseeable future, but the scope of outsourcing agreements should be subject to change as the client’s needs evolve. At the same time, a provider has to have minimum commitments to be able to invest in the work of its customers.’
5. Being too one-sided in your view of the relationship
"The most successful outsourcing relationships–those that lead to long- term value creation for both parties. It is critical to never lose sight of the fact that the relationship is a bilateral one. Just as the client company seeks to save money, reduce risk, and/or enhance the quality of its operations, the service provider seeks to earn a profit, build on its service capabilities, and leverage its growing expertise for the future.
Fortunately, these goals are complementary. An insurance company, for example, can not only gain efficiency and quality by allowing a partner to take on much of its back-office policy administration functions, but the added work volume may enable the service provider to accelerate release of the next advancement in the intellectual property it has brought to the relationship–a win-win scenario."
Tags: outsourcing