Selecting the right outsourcing partner

Its been some time since I put forth my views on transforming one's approach to outsourcing. The key of course is to select a partner who will help solidify that approach. Traditional price benchmarks seem to be the decisive driving factor towards vendor selection but would it necessarily ensure good customer centricity? The problem with the price argument is that it could be undercut any moment and doesn't really bring about any value added change. So what should corporations be looking at instead? I thought of a few guidelines which might  be good pointers in understanding if the outsourcing partner is likely to fit the bill or not. Of course, one might tick all the boxes and still come up short or maybe not tick any at all and be the best outsourcing deal. As a thumb rule though, i think these might be pretty useful.  Anyway, here are a few pointers I could think of: 

1. Whats the record in managing customer centric projects? Service Providers Service Delivery, SLA management, reporting, security compliance, communication and cost management capability
2. How do they handle their relationship with you: Organizations should look at the service providers’ ability to understand the business, align the appropriate resources, set up a robust governance and escalation model and collaborative set up
3. Do they have a proven Business Process Improvement plan? Assess the service provider for Quality methodologies, experience in delivering productivity improvements, continuous improvement frameworks and experience and measurable customer satisfaction metrics
4. Do they have any Innovations to show? Most importantly, corporations should analyze the service provider in terms of experience in implementing transformational changes like new technologies, delivery models and pricing mechanisms

A fair amount of analysis would be required to really get some quantifiable answers to the questions above..but spending the time and effort to get these answers would be totally worth it in the long run. After all, your outsourcing partner could well be the different between customer churn and customer delight!!

All things Telecom: Transforming Business Process Operations

All things Telecom: Transforming Business Process Operations: "I was reading an article recently which stated that the world economy is going to enter another recessionary cycle come 2013. Now that certa..."

Transforming Business Process Operations

I was reading an article recently which stated that the world economy is going to enter another recessionary cycle come 2013. Now that certainly took me by surprise. We have hardly recovered from the first shock and they are already talking about hitting us with another!!


Anyway this got me thinking..how would companies continue to make the profits that they have been used to. The obvious method in a shrinking market is to cut costs and streamline their businesses. Thats where i believe that the BPO industry is going to gain in the near future. Organizations are going to be forced to outsource their non core functions at an even more rapid pace then they have been doing so far. Now this means that companies will need to be even more careful and discerning when it comes to picking the right outsourcing partner. How do they do this? How do they achieve their outsourcing nirvana? Some thoughts....


As the cost of operations in the traditional outsourcing hubs rise, organizations are under increasing pressure to look at other avenues to cut costs. Thus, an all encompassing strategy which addresses all the touch points across the process outsourcing cycle is needed. Business Process Outsourcing ought to be looked at as a bundled service with an intricate interplay between Process, Technology and People. Integrating technology and Human Resources with the core process lies at the heart of providing a 360° Customer Experience.

Roadmap to Transformation

Undertaking such a holistic transformation is easier said than done though. Experience suggests that a stepwise model with gradual payoffs outweighs the benefits of a Big Bang approach. At the heart of the transformation roadmap lies the maturity in the relationship between the customer and service provider. This is because wringing out the last drops of efficiency and cost reductions while exceeding customer satisfaction metrics requires a much greater depth in understanding Business Drivers and Process Metrics than previously thought essential. An all encompassing transformation exercise can be looked at as progressing through three distinct phases:

Stage I: Operations Transformation – In the initial days of the relationship, “Quick Wins” are what drive change. Benefits are derived mainly from off shoring and efficiency gains through greater operational rigour. Operational levers such as cross skilling & multi-skilling of resources and workforce management also result in significant savings.

Stage II: Process Transformation – Once operations are stabilized, it gets increasingly difficult to effect savings through operations quick fixes. The client – provider relationship has by now grown more robust and affords a deep dive into the possibilities of process reengineering. Benchmarking, point automations, sharing best practices among teams and six sigma projects can all be leveraged to good effect during this stage. The key to successful implementation of these measures is a good understanding of the underlying processes and active participation of the client. Stable operations with accurate forecasts also afford the chance to move to transaction based pricing models thus incentivizing the supplier to achieve greater efficiency.

Stage III: Business Transformation – The third stage represents the final step in the transformation journey. Improving on key business metrics is of prime importance here and this stage involves making major changes in the way the business is run. Business Consolidation, system rationalization and even Organization change coupled with robust governance structure and a dynamic change management apparatus could be a tool for improvement. Of course, a very strong client – supplier relationship is critical to drive these changes to fruition. Achieving true business transformation can help corporations make the next quantum jump in their mission to achieve customer delight with minimal investment.


Now that we have a framework defining what companies ought to look for in their outsourcing partner, the next step is actually going ahead and choosing one. Thats easier said than done.. traditionally this decision has hinged on price and price alone..but are there some other factors one must consider? I think there are...but more of that in my next post...