Managing in an outsourced or shared-services model is more complex than it sounds, just ask anyone who’s done it before. But there are huge benefits if you get it right.
As an independent advisory with deep experience in this area, we can help you get the most out of your providers.
We have designed, implemented and fixed numerous outsourcing engagements, from small, to multi-billion dollar.
We have designed a leading edge Governance and Engagement model (GEM) that has been used by two of the three largest providers in the world.
We teach the AOP (Accredited Outsourcing Professional) designation for CORE (Centre for Outsourcing Research & Education)
We can help you get the most out of your providers, and just as importantly, get the most out of your own team.
“20% of Outsourcing deals fail within two years, 50% within 5 years” according to Dun & Bradstreet
Not getting it right can cost you a whole lot of money and waste years of your time focusing inward. Getting it right can put better products and services into your (and your clients) hands more quickly, saving you a significant amount of time and money, which is critical to just about everyone in this hypercompetitive era today.
So how do you get it right?
- The skill set to successfully implement outsourcing arrangements is a skill set that most organizations do not have, either as a core competency, or in sufficient capacity.
- However the recognition that the organization NEEDS that skill set in order to be successful, is one of the key differentiators between success and failure.
- To be successful requires a significant effort within the outsourcing organization, to agree to, and dedicate already busy resources to the proper transition of the in-house services to the outsourcing provider, followed by the appropriate resources to manage the transformation of the organization to the new service arrangement, followed by sufficient resources to manage the ongoing relationship.
- Building a team with people who have successfully managed one or more outsourcing initiatives before, and whose job it is to focus solely on that change (ideally somewhat removed from internal organizational and political boundaries), is the single most effective factor in increasing the odds of success.
Getting experienced veterans on your team is only the start
Every situation is different but we’ve learned through tough hard slogging, that if you can implement the following reasonably well, your odds of success rise dramatically:
- Ask the hardest question first: Can your organization really “let go”?
- Spend the time to clearly understand what makes you exceptional, and what it is you do better than most. After that, everything else becomes a candidate for outsourcing
- Know WHY you are outsourcing. For example, outsourcing for cost savings will entail a very different operational model than if you are outsourcing for service improvement.
- Select your service provider not just on cost, but on best fit of: experience, culture and leadership team
- Invest time in getting the contract right, and more importantly, simple. The clearer the contract, the less disputes and misunderstandings.
- Your governance model should be jointly built. Nothing is more important than ensuring performance aligns to expectations. And nothing is more important than ensuring expectations are constantly aligned between all key stakeholders.
- Long term relationships should be built for change. Flexibility to rapidly adapt to changing environments is the key to longevity.
- Align incentives on both sides (or all sides) to the desired outcomes. If you’re looking for the nugget of pixie dust, this is it.
- Nothing ever works as planned. Stuff happens. The speed at which issues are resolved and decisions are made is the #1 operational factor in determining long term success or failure. Ensure a process is in place such that issues get to the appropriate decision making forum as quickly as possible.
- Ensure you can EASILY accept, action and satisfy business needs and requests. Just because you are transitioning to a new service model does not mean the business should stand still until you are done.
- You can outsource responsibility, but you can never outsource accountability.
The Outsourcing Lifecycle:
- Continuously Improve
The Shared Services Lifecycle:
- Functionalize & Rationalize
We’ve got deep experience in all of the above. We understand outsourcing, we understand shared services.
Nobody does it, like someone who’s done it.