Since outsourcing is a business model whose success depends on the relationship itself, how important is it that the top execs of both the client and service provider companies develop personal relationships with each other? Does it really help the outcome – the achievement of objectives – in any way?
Let me first put come context around “develop personal relationships with each other.” I’m not referring to the activities (although they are crucial for success) companies undertake where there is an offshore service delivery component and both parties need to visit each other’s countries and learn more about each other’s… Read the rest
The due-diligence task of talking to a potential service provider’s existing clients for references on the provider’s capabilities is part of the first line of defense in trying to structure an outsourcing relationship for success.
But it’s somewhat like talking to the poison taster for a king – clients giving references are those who tasted the provider’s services and lived on to tell the tale.
Sure, finding out if the provider has successful past experience with a deal of the scope and complexity of the deal under consideration is of vital importance. Absolutely. But wouldn’t the potential buyer also benefit… Read the rest
Realistically, how long can an outsourcing service provider and its customer go without having a conflict? Though people often compare an outsourcing relationship to a marriage, it’s not the same when it comes to conflicts. For instance, in a marriage where the couple has conflicts over how to manage their money, they can open separate bank accounts. In an outsourcing relationship, the decisions each party makes – or wants to make – impact the other’s wallet; so conflicts are inevitable.
The way the parties handle conflicts can decide a relationship’s fate. Sure, they establish the basics for this at the… Read the rest
This is the first in a frequently recurring column in Outsourcing Buzz Blog focusing on thought leadership in outsourcing, as seen from the perspectives of two industry leaders with unique views into the workings of how outsourcing deals really get put together – or why they don’t. Insights in this recurring column come from sourcing advisors, Joe Vales and Kerry Ann Vales of Vales Consulting Group and Vales Consulting Lite.
This week I asked Joe and Kerry Ann this question: What should never be underestimated as valuable – but often is – when it comes to outsourcing? Their immediate… Read the rest
Win-win approach. Collaborative relationship. These buzz words are tossed out frequently as a hallmark when executives describe their outsourcing relationships. But the terms are apt to be misused. I’ve had some interesting conversations about winning and collaborating in outsourcing relationships. One executive summarized an event in his company’s relationship this way:
“When we identified the root cause of the issue, we collaborated to determine the solution that would meet our needs and be a win-win.”
Despite the fact that a lot of companies use the buzz words and label this kind of situation as a win-win approach and as collaborating,… Read the rest
Every now and then I find out something about outsourcing that really surprises me. That’s what happened recently when I learned the status of an outsourcing relationship I’ve followed for several years. I bet the service provider in this relationship was just as surprised as I when the deal was turned on its head.
The buyer outsourced its total IT infrastructure and application development and maintenance to a leading service provider more than a decade ago. They renewed the contract early, and they added scope. The provider achieved the targeted cost savings and productivity improvements. When I’ve talked with the… Read the rest
I recently switched to a different dentist – but not because I didn’t like the prior one or the dental care he gave me, nor did the switching have anything to do with the prices he charged. I left because of the hygienist and the receptionist in his office. It’s a situation very similar to what many buyers experience in outsourcing relationships.
I have some non-dental health issues that affect my dental treatment and require some special considerations at the dentist office. These issues and necessary workarounds prevent a dentist and his staff from treating me the same way they… Read the rest
I recently watched a video of National Geographic photographer Brian Skerry’s efforts to document what has been happening to undersea creatures over the past several years because of people overfishing the oceans. This and other actions we’ve taken that are harmful to marine life have led to a global fish crisis where many species are now critically endangered; some species have lost 90 percent of their stock as a consequence of our actions.
Ninety percent is a really high number – so is the number of outsourcing relationships that fail these days even after decades of learnings about outsourcing’s keys… Read the rest
Can diversity management in outsourcing make a difference in the potential return on investment (ROI)? I discussed this issue with Joe Santana, Senior Director of Diversity at Siemens USA. He has an extensive background in outsourcing, even prior to his diversity position with Siemens, providing him the opportunity to see from the inside and outside how effective diversity management can be an important factor in outsourcing relationships.
Please explain how diversity arises in outsourcing. Is it something more than having a workforce of multiple races and ethnicities?
JS: Yes. Add to that the recent increase in the number of… Read the rest
“Honesty is a good thing, but it is not profitable to its possessor.”
Outsourcing wasn’t a business strategy when Don Marquis, an American newspaper columnist and short story writer (1878-1937) wrote that line. But the attitude he described is present in many of today’s outsourcing relationships.
Over more than a decade, as I’ve interviewed hundreds of executives in outsourcing relationships, I always ask about their keys to success. You wouldn’t believe how many times a buyer says “mutual honest communication.” Not very many times. It’s not because it isn’t a key to success; rather, it’s because it seldom happens. And… Read the rest
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