Comments on: How an Outsourcing Service Provider Lost Business

By: BM Rangan

BM Rangan — Thu, 15 Sep 2011 11:39:58 +0000

This is an interesting story and I have he following takeaways from it:

A service provider can never take an outsourcing relationship for gramted – The value of the relationship is only as strong as the value add that the service provider offers the buyer and in addition to creating the value add how effectively the provider communicates to the key people in the buyer’s organization. This does not seem to have happened in the case of the provider wh lost the business

It is critical to estimate effort -’what it takes’ to do a job rather than yield to short term business pressures – While cost is important outcomescould be even more important to the buyer organization. The service provider seems to have compromised delivery quality because of profitability concerns.

Partnership is a two way process – When two parties describe a relationship as a partnership there are a set of behaviors that both provider and buyer need to manifest. It helps to articulate the behaviors early in the relationship. This would help either party to evaluate the dispalyed behavior with respect to the desired behavior and make needed course corrections. Otherwise there is a clear and present danger of the partnership deteriorating without it being consciously noticed

By: Real Estate Agents Richmond

Real Estate Agents Richmond — Mon, 11 Jul 2011 17:36:55 +0000

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By: Outsource Call Center

Outsource Call Center — Wed, 05 Jan 2011 04:27:00 +0000

Interesting post! Outsourcing the lead process increases the company’s sales and revenues while cost is reduced. Anyway, thanks for sharing this informative post. Looking forward for your next post.

-fern-

By: Philippines Offshoring

Philippines Offshoring — Wed, 24 Nov 2010 07:53:36 +0000

Outsourcing really helps for business…

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By: Kathleen Goolsby, Senior Writer, Outsourcing Center

Kathleen Goolsby, Senior Writer, Outsourcing Center — Fri, 20 Aug 2010 17:20:13 +0000

I think your assessment of the “crux of the problem” is correct. What can be done to eliminate this? Can buyers add this provider characteristic to their selection criteria when considering which provider would be the best partner? Can they check with the provider’s other clients to detect whether this has happened — and would those clients tell the truth? Sometimes, though, the buyer is the source of the problem in its demand for continual cost savings. What needs to change to prevent this demand from resulting in loss of expertise? Must it be handled up front in the contractual terms, or is it best handled in governance meetings where cost-reductions ideas are discussed?

By: Ajeva

Ajeva — Tue, 03 Aug 2010 10:28:30 +0000

When it comes to large outsourcing deals, partnering can definitely help. But when there’s a contract in place and you’re working within the bounds of the contract, it is hard to just implement a change – unless there are revisions to the fine print. Yes, projects do evolve along the way and one needs to be flexible. But how to weed out innovation from scope creep? This is why no matter how easy to turn to plan B when plan A fails, people stick to what was originally planned.

By: Junel Oswa

Junel Oswa — Mon, 12 Jul 2010 02:08:40 +0000

I completely agree with you. Thanks for sharing this information. You may want to read more from “Outsourcing Philippines.”

By: Matthai Vettath

Matthai Vettath — Thu, 01 Jul 2010 14:08:47 +0000

I have been the manager for HP’s BPO for IT Infrastructure procurement operations outsourcing at Chennai. Essentially it started with order entry from one system to another and slowly moved into managing the catalog , checking the requirement , order follow up and finally to controls to even check requirements. What was significant in the outsourced operations is that within a year of operation the knowledge shifted form front end to the back end. Significant knowledge was gained to bring in efficiency and improve the systems.By itself the overall process transitioned had significant advantage of efficiency of work, single point control , ability to monitor spends and get an overall tracking for global operations.

When this is set into a smooth routine operation , BPO outlook tend to change with a narrow focus on transaction alone forgetting the work itself. This is the crux of the problem when senior staff from front end and BPO are taken off and management applies pressure to use new recruits to cut costs . This is where failure starts when BPO management does not value knowledge and operations significance but reduced to just plain Head count costs and high value transactions are reduced to time components .

This is the case when its outsourced internally within HP, then just imagine case when its outsourced to third party . I would only stress on understanding the overall outsourcing knowledge and management requirements to have a continuity to make outsourcing a success. Alternatively, if this is not done the new teams do not know the implications and processes leading to costly failures generally not visible in first 2 years of outsourcing. Essentially lack of knowledge and sending out of core expertize have lead to outsourcing failures

This is to caution operations where BPO management looks at transaction cost reduction only and looses in essence the importance of the operation and its significance to the company .

By: Kathy Eldridge

Kathy Eldridge — Thu, 01 Jul 2010 08:55:59 +0000

I am always worried about the over-use of the “partnering” word. In the end, clients want to save money, sow an improved service and look good to their bosses, and providers want to deliver a standard service with as little hassle and as big a margin as possible. The relationship does not have to be adversarial but it can never be “cosy.” From my point of view, in order to have the best chance of a good relationship you need the following from both sides:
– absolute honesty about what is achievable, no vapourware and no smoke and mirrors
– As much transparency as possible about cost
– Efficiency is better than emotion – clients may love to hear providers tell them how much they care but not if the service is rubbish
– A real understanding on the provider’s part of ther client’s business landscape, drivers and pinch points.

Simple!!