Outsourcing - Part 6

Defining relationships

• Treat outsourcing vendor contractors as you would your own employees in terms of respect and mistake management
• Develop local leaders who understand the corporate culture
• Obtain approval rights for vendor leadership personnel
• Locate contractors at your captive overseas locations
• Establish dedicated relationship managers on your team

Negotiating new terms

• Clearly define service expectations
• Expect contracts to need adjustment over time
• Keep it simple; avoid complex formulae for severity levels and escalation rules
• Frame renegotiation in terms that emphasise the benefit to the vendor

Key performance indicators

• Explain to business leaders that outsourcing requires more management oversight and planning than in-sourced service
• Don’t set key performance indicators (KPIs) for performance that can’t be measured
• Establish KPIs before creating service level agreements
• Include regional managers as early as possible in establishing performance requirements
• Develop a performance measurement process that does not force users to distinguish between outsourced and internally-provided service

Service level agreements

• Keep service level agreements (SLAs) to a minimum — if you didn’t track it before, you may not need to track it now
• Don’t create SLAs for every little thing Establish SLAs as a minimum expectation, not the optimal goal
• Don’t make SLAs technical and disconnected from the end result
• Expect to adjust SLAs as contracts change
• Try adjusting SLAs rather than renegotiating whole contracts

Source: CIO Executive Council

Read more in the CIO Australia outsourcing series

Part 1 - Top outsourcing countries and trends

Part 2 - Clients and incumbent vendors are renegotiating outsourcing deals before they expire

Part 3 - Global versus local

Part 4 - Negotiating contracts and maintaining relationships

Part 5 - Notes from the trenches

Also:

Nine ways to find hidden savings in your outsourcing invoice