TLC not SLA is secret to outsourcing success

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TLC not SLA is secret to outsourcing success

Outsourcing based on mutual trust rather than punitive service level agreements can create 20% to 40% difference on performance indicators such as service, quality and cost, according to research from LogicaCMG and Warwick Business School.

"Power-based relationships are poor substitutes for trust-based partnerships, given the high transaction costs of monitoring and imposing sanctions and the limited goals that can be pursued by both parties," says Andrew de Cleyn, senior vice-president, global service delivery at LogicaCMG.

Ignoring the value of the relationship with your outsourcer and failing to put the right people in place to manage it is "tantamount to corporate negligence," says Leslie Willcocks, professor at Warwick Business School and report co-author.

The report points out that a successful relationship doesn't happen by accident. "It comes from planning, is steered by the right people, structures, processes and measurement, and is earned from performance," argues Willcocks.

The clear implication is the you need to perform regular health checks on outsourcing relationships that you may have and use techniques such as balanced scorecards and executive dashboards to assess progress

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