Tips for Reducing Pain in the First 18 Months of your New Provider Relationship

Sourcing clients generally report that the first year and a half of their outsourced services relationships are a painful time. There will always be startup issues to be addressed. But, assuming you have a strong transition plan in place, you can take a number of steps to ensure that you minimize the pain and maximize success during this complex period.

Consider these Top 5 tips for managing your outsourced services startup:

1. Consider rebadging or seconding your top knowledge talent to your service provider.Most companies retain their top subject matter expert talent for fear of losing knowledge or control. This can result in the service provider team struggling through knowledge transfer; then the retained team is frustrated because the provider “doesn’t get it” the way the retained people do. Failing to realize the benefit of rebadging could cause you to end up letting these valuable people go later – which doesn’t serve the relationship, the services, your company or the affected employees.
2. Ensure you have enough of the right people in governance and relationship roles ─ early.Most companies retain enough subject matter experts to manage the services but often fail to retain enough in the governance function to manage the relationship. Managing a sourced service requires different skills than managing a retained service. Having too few people to “catch” when service delivery and relationship issues arise results in rampant frustration on both sides of the relationship.
3. Create and live by an issue management process.Provide a clear, simple, and preferably automated way for your service delivery and governance teams and the service provider teams to document issues that need governance attention – and publish a promised response time. (This process often reveals understaffing of the governance function.) If teams have issues and nobody responds, there will be substandard results, frustration and disappointment. Ultimately no one will trust the process, and issues will go unknown and unresolved.
4. Actively study issues to determine root causes.Similar problem symptoms will emerge in various areas, especially in large engagements.The common underlying cause of these systemic problems should be addressed swiftly in the governance process. If each problem is taken in isolation, time and effort will be wasted in addressing it repeatedly at each occurrence, and the root problem will not be solved.
5. Create your governance structure early, and pattern your transition governance on it. Don’t create an “exceptional” process for transition management. You may meet more often during this period, but it should be with the same teams and essentially the same agendas as for ongoing services ─ especially when services are being phased in.

TPI’s Service Management & Governance experts can help you achieve your organizational goals through objective advice, knowledge of your industry and experience with arrangements from simple to complex. Contact Cynthia Batty, Director, TPI, to learn more.

About the author

Cynthia brings 25 years of experience helping clients develop their sourcing governance and service management design. Having worked with more than 50 organizations to improve business management and service management processes in both single-provider and multi-provider environments, Cynthia has become a recognized expert in sourcing governance, vendor and contract management. She currently serves as the architect for ISG’s service methodology and global integrator of its products and services. Cynthia works to leverage ISG’s accumulated intellectual property resources to help enterprises create effective transformation and governance capability, and maintains a continuing role in the Strategy and Organizational Change Enablement practice.