The Outsourcing Relationship: Dealing with the Changing Times

On April 3, 2013, in Outsourcing, by Business Development Group
The Outsourcing Relationship: Dealing with the Changing Times

Outsourcing relationships are generally long-term partnerships between the client and the outsourcing service provider. Both parties need to understand that through time, the arrangement between them may no longer be applicable to their needs in the future.

According to leading global information technology research and advisory firm, Gartner, common problems encountered by many firms engaged in outsourcing deals include poor communication, lack of flexibility, as well as unfulfilled goals and expectations.

Outsourcing relationships are generally long-term partnerships between the client and the outsourcing service provider. Both parties need to understand that through time, the arrangement between them may no longer be applicable to their needs in the future. Like any other relationship, the outsourcing partnership needs to be managed, re-assessed and evolved over time in order to match changing goals, expectations, and market circumstances.

Related Article: Outsourcing: Solution to Start-ups’ Skills Gap

The following are the 9 steps developed by Gartner to aid organizations manage and evolve outsourcing deals and maintain a healthy outsourcing relationship:

1. Assess the Situation

Identify key issues to the outsourcing deal, what issues need to be fixed, and the investment required to implement these changes.

2. Identify Goals for the Improvement Process

Identify and set the goals of the improvement process for the outsourcing program, and align the revisions on the processes and structure according to the new set of objectives.

3. Achieve Agreement on Critical Goals

Mutual agreement and understanding between client and outsourcing provider must be achieved in order to implement the changes required for the new set of processes and structure defined and achieve the goals set.

4. Escalation Plan

Develop and establish an escalation plan, defining who is involved in each goal, the right levels of approval, and ensure that both parties comply with the escalation process.

5. Escalation Executive

A client executive must be assigned as early in the process as possible in order to lead the entire escalation plan and ensure that the changes are implemented.

Related Article: Outsourcing Customer Services: Maintaining Levels of Customer Support

6. Review Meetings

Both parties must commit to frequent and regular review meetings in order to identify and resolve any issues that may arise, as well as communicate updated plans to all stakeholders.

7. Issue List Update

Communicate the updated list to the stakeholders once it’s been approved. This must be done on a regular basis.

8. Implement Behavior Drivers

Changes must be implemented based on the outsourcing service provider’s behavior.

9. Identify and Manage Risks

Devise and implement a risk management plan.

 

Related Article: Philippines Emerging as Top Offshoring Destination for Australian Outsourcing Market

 

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