The use of the skills and capabilities of people in other places clearly helps businesses in maintaining their operation at lower costs. However, outsourcing is not a flawless transaction and it is expected that in every partnership established, problems will be encountered. Issues can be as minor as not being able to follow the correct reporting format or as major not performing the required task as agreed in the scope of the project.
The leading motivation for outsourcing is cost reduction. However, there are other advantages, including more efficient use of resources, improving service, and the ability to work with true experts in non-core business operations.
Regardless of why your client is outsourcing their process, managing the ongoing relationship with that client is crucial. From the moment the contract is signed, you want to make sure your organization maximizes its benefits.
So, how do you best manage an outsourcing contract? How can you build a strong relationship that protects both your and the client’s company from unnecessary disagreements and conflict? And how do you avoid wasting valuable time and resources – and, perhaps, avoid losing some of the benefits or in the worst case scenario, termination of the outsourcing arrangement?
Communication is always crucial in business, whatever industry it may be serving. However, miscommunication is often experienced by those who are involved in outsourcing because of the cultural and language barriers which may be present. This poses a threat to the integrity of business procedures carried out. In extreme situations, miscommunication may lead to business failure and problems with the dedicated outsource staff. Such problems may be left unanswered and result to delayed progress and disregarded issues.
To remedy this, a permanent time and means of communication must be identified and implemented. A method of constant communication between your key staff members and the client’s members charged with the oversight of the project will prevent mistakes, enhance communications, and ultimately lead to increased client relationships and improve long-term opportunities. Daily progress reports, which include: details of goals achieved, current project expectations, past project performance, identified issues and concerns and recommended remedial actions, must be included in the daily communication process as these improve the relationship between the client and the provider.
Maintain Regular Communication
It’s important that you have a well-established communication system for regular checkups, and for managing occasional issues and concerns as they occur. Both you and the client need to know what’s happening, and you also need to ensure that you are consulted when something unusual happens. Outsourced business relationships are long-term and ongoing, it is vital to both you and your client’s success that you stay in close contact – even when everything appears to be work well.
Appoint a project manager, or other key member, to communicate with the outsourcing partner on a regular basis – and establish a key contact person at the supplier. It is vital that the project managers has the authority and knowledge to suggest and make needed improvements as suggested
Keep senior managers and other stakeholders on both sides informed of activities, to ensure ongoing support of the outsourcing relationship. This is especially important during the first year, because unexpected problems may cause senior management to withdraw their support.
Have managers and stakeholders on both sides available to answer questions if either party encounters a problem. Determine, define and document expectations from both parties. It is important that you attempt to anticipate the types of issues that may arise and provide key contact information on both sides to allow immediate response and rapid resolution to issues or concerns.
Keep each other informed about changes to the work environment. These include key staff members, process and procedure changes, equipment and supplier changes, etc..,
Ensure that communication channels are established between your organization and your client’s at all the appropriate levels. Each side needs to know who to contact directly, without having to go upwards through an endless chain, to the appropriate manager, and back down to the person who actually has access to the original document.
Establish and Measure Performance
It’s common practice to establish a regular performance review process in the first year of an outsourcing relationship. This allows you to develop an effective communication system and keep in close contact with the supplier. It also gives you a way to move the relationship forward. While it is common to establish a first year review process, it is vital to establish and maintain an ongoing performance process.
Initial performance levels shouldn’t necessarily be taken as indicative of your either party’s true ability: although the provider will often times be chosen based on their expertise in their field, they will still need to learn things about the client’s organization and you will need to spending time and resource documenting and passing knowledge about one another’s unique business requirements.
You must to be able to determine whether you are meeting or are able to meet the Service Level Agreements that were defined as part of the contract. Make sure you have the right mix of qualitative and quantitative measures.
Certain workers may or may not be able to do a specific task due to poor orientation or complication. For example, a person is asked to create a web page utilizing PERL’s for the company’s up and coming marketing campaign, but their training has only been limited to search engine optimization. Some managers and key client contacts tend to forget to truly measure their people’s capabilities and some recklessly delegate tasks which are not in their scope of work for the sake of delegation or based on relationships and a desire to help someone achieve growth and opportunity. This will inevitably result to a waste of time, resources, and money as well as adding unnecessary stain on relationships. Allowing people to learn new skills and advance their knowledge must be closely monitored and evaluated by a season professional with the appropriate skills and knowledge.
To prevent such mistakes from happening, the company needs to make sure that the staff they will be hiring is capable of doing the list of tasks they are intended to provide. If the worker is willing to be trained, then he or she should be trained by an expert from the company’s end for quality and accuracy. It wouldn’t hurt to invest a little time if it means ensuring the future. However in the beginning, the staff’s skill and ability needs to be measured properly to see if they are truly a match with the position available.
One area where outsourcing relationships can go wrong is when requirements evolve substantially, and both parties are unprepared to meet the new needs. In this case, you may need to terminate the agreement early. As there are usually penalty clauses for doing this, the sooner that both sides are aware of changes the better; with enough notice, you may be able to develop the type of extended service you’ll need.
Staffing practicalities: If the business process is being done by new people as opposed to your experienced staff, you will need to monitor whether the people who are actually doing your work are of the quality that you were expect and promised in fulfillment of the service process. If the work is substantial, then your will have taken on new staff to carry it out the terms of the agreement. When a team of staff members have to be recruited in a short space of time, their knowledge and standards may not be at the ideal level. In addition, they won’t have had time to get to know yours and your client’s processes, and time constraints may limit their training.
To mitigate this risk, you ensure that you and your team leaders know what the processes and expectations are and to remain alert to those standards that are not being met. You will need to be proactive about identifying and correcting short comings. If possible, ensure that the team members assigned to the project contain a mix of new and tenured team members.
Create a Partnership
This is about going beyond the contract. An outsourcing relationship relies on mutual trust and respect. If you remember to treat one another as partners, you will establish a business environment in which you can productively work through inevitable problems in the future.
Both parties need to be open with your business objectives. Discuss goals and how you believe the relationship will help of you achieve them. Be flexible. Recognize that change happens, and work with together to find solutions. Establish hands-on support from senior management and other key stakeholders. Establish and maintain daily communication, define objectives, and create a report process on the project progress.
Because this is a long-term relationship, there will be issues, obstacles, and changes in how the work is delivered over time. By establishing a process to deal with these challenges, you’ll avoid a great deal of confusion, frustration, and lack of trust.
You need to understand that the demands are challenging. In a context of ever-increasing volumes of information, juggling competing requirements of quality and sustainability is no easy task. Given the impact of cost control on most organizations’ balance sheet, an outsourced service relationship offers an innovative approach to re-gaining control over costs. A well-managed outsourcing process also deals with a host of other issues brought about by a maturing information age, such as meeting efficiency, sustainability and security targets, all the while taking advantage of the latest technology solutions.
Managed print services is by no means a panacea; but, when implemented correctly, and in the light of a changing business environment, it can lead to considerable and tangible improvements, and can bring those that you serve one step closer to optimizing their business processes, and improving overall business performance.
Remember these basic rules;
Be realistic about resources
Clearly define and document expectations
Establish clear service level agreements
Establish and maintain; open, and two-way communications
Develop a reporting scorecard process
Implement and continuously refine the quality process
Establish key contacts and provide a means to access them
Communicate errors or problems immediately and work to resolve them
As a printer, are you prepared to enter into these challenging, yet potentially long-lasting relationships? Or, are you prepared to have others come in and offer these services to your key clients.