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Relationships key to outsourcing success

A commanding 83% of the 150 delegates surveyed at the National Outsourcing Association (NOA) Summit regarded the relationship with their outsource supplier as more important than performance or meeting service level agreements (16%). Only 1% thought the contract was most important.

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Outsourcing

A commanding 83% of the 150 delegates surveyed at the National Outsourcing Association (NOA) Summit regarded the relationship with their outsource supplier as more important than performance or meeting service level agreements (16%). Only 1% thought the contract was most important.

“Gone are the days when cost was the only driver. In order to ensure success, suppliers and customers have to ensure they have the right relationship,” comments Martyn Hart, chairman of the NOA Summit.

Cultural incompatibility and failures in the relationship - cited by 79% - were the major reasons companies did not renew their contracts.

These potential pitfalls should be sorted out at the requirements stage, believes Kesh Sharmer, director of Magellan Consultancy Services, which advises on offshore outsourcing.

“It’s all part of getting it right up front and then it’s all about not beating the supplier up and ensuring they feel part of the team,” Sharmer adds.

A three or four-month interim contract will give both sides time to get to know each other and iron out differences.

In short, you also need to be more realistic about what an outsourcer can do and not expect perfection from an outsource supplier from day one.

“Even for accounts payable, it’s sold to customers that the staff are graduates, so people think they will be 110% up to speed on day one of outsourcing,” concludes Sharmer.

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