Delving into Outsourcing Relationships

On January 18, 2012, in Outsourcing, by Business Development Group
For a business to get services provided from a cheaper country, but it is another thing entirely to realise that a company's ability to execute internal strategy depends on its outsourcer. This is largely because the business has to rely not just on the supplier's ability to deliver, but also on its ability to adapt strategically and make changes according to customer needs.

For a business to get services provided from a cheaper country, but it is another thing entirely to realise that a company's ability to execute internal strategy depends on its outsourcer. This is largely because the business has to rely not just on the supplier's ability to deliver, but also on its ability to adapt strategically and make changes according to customer needs.

Be it offshoring or plain outsourcing  – everything has now changed from a pure client and supplier relationship to a much deeper partnership. Businesses can save billions through outsourcing, with businesses forced to reduce overhead and boost productivity with minimal cost.

For a business to get services provided from a cheaper country, but it is another thing entirely to realise that a company’s ability to execute internal strategy depends on its outsourcer. This is largely because the business has to rely not just on the supplier’s ability to deliver, but also on its ability to adapt strategically and make changes according to customer needs.

A certain level of flexibility can be pre-negotiated, particularly when renewing a contract with an existing, trusted partner but a lot of it is simply based on responding to changes in the business, the industry and the economy.

Read related article: Steps to take before Outsourcing

This has been prevalent during the recession, when many businesses were forced to make tough decisions. The most innovative outsourcing suppliers are those that can create flexible contracts.

Read related article: Outsourcing Organizational Capability Assessment

Few companies can foresee what will happen in the next five years, so contracts need to be defined accordingly. Both sides need to think about how their partners would respond, and how the framework would respond to changes in technology, economy and strategy.

Read related article: Philippine Outsourcing: What is a BPO Virtual Captive?

Flexibility defines the shift from a contract to a partnership, creating a whole new world of possibilities. But trust is fundamental here. Strictly defined contracts can only go part of the way towards ensuring that things run smoothly.

Read related article: BPO Real Time Outsourcing Customer Engagement – Giving your Customers More!

That’s not to say that contracts and rigorous criteria should be thrown out of the window. These are still vitally important for underpinning the foundation of the relationship. However, the legal aspects should be guided by the managers rather than the lawyers, who are often trying to mitigate the risk rather than creating operational success.

Read related article: Call Center as a Marketing Channel

Offshore providers are often criticised as not being innovative, but those who are willing to invest in a much deeper relationship with their clients can take the discussion beyond cost and on to value.

In-house or to Outsource? Know the difference!

Meet outsourcing Casey!

2 Responses to “Delving into Outsourcing Relationships”

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  2. [...] ng into Outsourcing Relationships | Northernworx” style=”width: 120px;float: right;clear: right;margin: 2px 0 2px 10px;border: 0 none” />For a business to get services provided from a cheaper country, but it is another thing entirely to realise that a company’s ability to execute internal strategy depends on its outsourcer. This is largely because the business has to rely not just on the supplier’s ability to deliver, but also on its ability to adapt strategically and make changes according to customer needs. Read more on Innovative Outsourcing [...]

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