A Tale of Two Outsourcers (cont'd)

Now, the woman's poise was clearly being tested. She knew her colleague was looking for empathy, but she wasn't suffering his problems. Were his problems that much worse, or was he just incompetent? Setting aside the thought, she said, “Well, we're doing okay. We've probably had fewer challenges along the way than you…Care for some coffee?”

“Sure,” he replies to your relief. One more drink and things were going to get sloppy.

As she reached out to pour the coffee, the woman thought to herself, “how do I tell my old friend here that outsourcing has actually transformed our business, and my life? I work sensible hours and enjoy my job. I focus on direction and strategy instead of firefighting. Costs are down, customers are happy, we might buy out customers from a lame duck competitor…how do I get myself out of this one gracefully?”

“Well friend,” she said, “I'm sorry to hear of your troubles but I wish you well in 2005. Please excuse me though, I just saw someone I need to catch up with. Drive safely.” And just like that, she disappeared into the crowd leaving her colleague looking a bit surprised. As he turns to say something to you…you are suddenly whisked back to the now. Whew…

How Outsourcers Succeed
On the face of it, these two colleagues had similar problems and tackled them with the same strategy – outsourcing. But what made the difference between his life being harried and his company failing, where her life is interesting and her company successful? Was it, as she suspected, her colleague’s sheer incompetence? It could have been; but people who report success with outsourcing all say pretty much the same things. Here are some of the secrets of their success – competence sold separately.

1) First, it's necessary to understand why there is a problem in the first place. For example, a high percentage of missed due dates is likely to involve process issues, not just system problems. Matters like getting the right materials to the right technicians; a shortage of capacity planning engineers; poor communications among customer care and provisioning; and sales flooding systems with orders at the end of every month are all process issues. Once the real elements of the problem are known, you can ask whether the problem can be solved with outsourcing.

Parceling up existing problems and transferring them to an IT infrastructure company will not fix any underlying problems. Understanding the root cause of poor performance is an essential step – whether you decide to outsource or not. Outsourcing can provide an excellent opportunity to make changes to processes, policies and operating procedures. With the right partner, it is possible to identify which changes can be made to produce the biggest gains.

2) Once the outsourcing route is chosen, prepare well for implementation and transition. It's not only the outsourcing vendor that needs to apply careful planning and intelligent thought to your migration - you need to prepare too. Every process should be traced to identify each touch point with the new outsourcing partner.

At every touch point, decisions need to be made about:

• the information to be shared;
• the type of information access required;
• any reporting requirements;
• and escalation guidelines agreed for every possible scenario.

Every person affected by the new tools will also need training on the new environment and rules. End customers will notice some differences too, so a communications plan to keep them informed is a necessary step. The most difficult decisions typically concern data integrity and the amount of time and money you're prepared to invest in scrubbing and reconciling information before attempting to transfer it to the outsourcer.

3) Finally, the outsourced environment needs to be actively managed . You may no longer be managing the applications and the data, but you can't just push off from the shore and hope you'll drift to your destination. In setting the contract terms and conditions, ensure that you've appointed sufficient staff, with the appropriate skills, to work closely with the outsourcing partner. Agree on reporting requirements, how emergencies will be handled - and what constitutes an emergency, and plan to invest in lots of face-to-face meetings to build a strong working relationship.

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