Game changers in successful outsourcing relationships

Key considerations for organizations looking to attain successful outsourcing relationships.

outsourcing tablet

I am excited about this blog and the opportunity to share with you some ideas and thoughts you may find useful to your organization’s needs. The first post is something I believe to be relevant to you – as attaining success through outsourcing can be challenging.

Organizations may adopt outsourcing as an alternative to reduce costs and minimize risks for activities not deemed core to the organizations’ business. However, an organization is usually unable to realize the desirable outsourcing value if one of the following game changers are missing:

Game changer No. 1 – alignment with the organizations strategy: if the need to outsource does not align with the organizations strategic planning and culture, it will likely not be perceived / considered by the organization as a valuable solution. Instead, it may be seen as a problem to manage at the expenditure of multiple departments, (e.g. IT and HR).

Game changer No. 2 discipline from strategy through execution: a sound outsourcing strategy can only be completed through discipline during all stages of an organizations’ sourcing lifecycle: (1) strategy definition, (2) determining the organization’s base case and business case to outsource, (3) determining the organization’s outsourcing requirements, (4) go-to market strategy, (5) service provider selection, (6) transition and (7) monitoring of outsourced services. The level of effort, support and dedication required by different groups vary during each stage - a structured approach throughout will help foster clarity and objectivity – which will likely increase the probability of attaining and sustaining success.

Game changer No. 3 – clarity on organizations’ requirements: a good understanding of the proposed services to be outsourced will help the client and service providers to better define their roles and responsibilities. In an ideal scenario, a client will define that as a separate schedule so service providers will be able to better understand their resource needs, skills required and client expectations.

Game changer No. 4 – research possibilities: there is a lot of value on conducting research on whether service providers are capable to meet the organizations’ requirements, their reputation in the marketplace, their financial health as well as their ability to innovate and adapt. An organization may find difficult to select one, as there are a lot of good service providers in the marketplace. During this step, it is important not to lose sight of the organization’s mantra and whether or not the provider of choice will be a good fit.

Game changer No. 5 – evaluate the internal degree of change: at the same time you are completing your external research, reflect on the organization’s capabilities as relates to the changes ahead – and whether or not a phased approach will benefit the process. On top of that, to actually manage the change by having support from its change management team, ensure the team is being properly informed and enabling success through training and assigning resources to roles where they can grow. If the internal team is not mature / ready for this type of change within the desirable timeline, consider reevaluating the organization’s strategy timing.

Game changer No. 6 – financial due diligence of client’s outsourcing base case and business case: Review of the proposed financials, assumptions and the client’s desired financial goals shall be completed and, to the extent possible, clarified with potential service providers during the selection process.

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