What makes an outsourcing deal work?

14 May 2013
Outsourcing works when you embrace and understand the concept of a partnership approach with your chosen provider. Your partner must be seen as an integral extension of any retained function and treated in the same way as any other colleague. Only by understanding that success is a shared responsibility between you and the provider, not the sole responsibility of either party, will you be able to create a powerful platform for transformation. Outsourcing works when it is underpinned with a clear mandate and executive sponsorship from the business to effect change. Of course, if it was easy we would all be doing it. Change is difficult but acknowledging that it may be you that needs to change is often the hardest thing of all. Understanding where you are and clearly articulating where you want to be in the future is the start of a process to recognise and acknowledge the need for change. All too often it is the lack of vision that leads to the breakdown of a transformation programme, as without it how can you properly plan for change? Your company needs to define its objectives, what it wants to achieve and what success will look like. If you don’t have an understanding of what needs to change, how can you engage with your customers to gain their contribution, support and advocacy? In Maslow’s hierarchy of needs people seek safety; they look for certainty and security. You need to convey the need for change, the reasons behind the need and ultimately the benefits to be enjoyed, and only then will your customers support the programme. Throughout any transformation programme the user community will look for leadership. The great leaders (arguably) of our time, Churchill, Thatcher, Mandela, all have provided a focal point and control. Consider why great leaders are remembered; for their vision, their calls to action, their wisdom, their ability to reach out and engage their stakeholders or is it their utter belief in their vision? Accountability is a key deliverable in any outsourced service: who, what, when and how much? As Jack Welch, former CEO of General Electric said: “The most powerful thing you can do is, well, be real.” Another great attribute of a leader is the ability to bring people and skills together and unite them in a common purpose to deliver something special. They recognise the whole is greater than the sum of the parts and consequently they alone do not possess all of the necessary skills and qualities to deliver their vision. Only by harnessing and blending different skills and contributions from existing resources and outsourced services can a more robust and rounded solution be delivered from a truly high-performing team. Utilising an outsourced service provider can bring the best of all worlds together, enabling you to draw on a greater talent pool without the cost commitment. You need to recognise any shortcomings, think about what you need to make it better and look for the right partner to realise the value. In summary, outsourcing works when you can:
  • Be clear about the vision and prepared to change yourself
  • Understand there will be an impact of any change and plan accordingly
  • Be bold and insightful in your actions with the conviction to see it through
  • Embrace the service provider’s skill and experience to facilitate and validate any change.
Nigel Kidd is client services director at Xchanging Procurement Services
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