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Blog | 07.26.2016

5 Checkboxes Your Outsourcing Governance Model Must Tick

For most organisations looking to improve productivity and value from their outsourcing vendors, getting onto the outsourcing governance bandwagon is the most obvious business decision. It is seemingly the most cost-effective way to get the maximum value from operations. You must be aware of the advantages of an outsourcing engagement, and in all likelihood already have an existing setup or are planning to establish one.

However, there’s a hitch: the success of an outsourced engagement depends on how well it is governed. There is a right way to deploy an outsourcing governance model, and several wrong ways of doing so.

Are you certain your vendor management team and/or outsourcing governance team is performing as effectively as you imagined it would? Probably not, which is why you’re reading this article.

Here are five simple ways for you to ensure that you have the right outsourcing governance model built. Read on to know how you reduce any risks involved in getting value from your service provider.

Is there sufficient visibility in your operations?

If you don’t know what is actually transpiring at the vendor’s end you have no control over your operations. Unless you are fully on-board with every single initiative and aspect of the work, you will have no real insight into how things are progressing. And will not be able to predict the outcome of the engagement, be it financial or delivery.

Are your vendor’s goals aligned with yours?

Have you and your vendor agreed upon your priorities? What might be critical for you might be somewhere lower down on the vendor’s list of things-to-do. This more often than not leads to difference in expectations of the outcome, and could create friction between the two teams.

Have you established Standard Benchmarks?

Uniform benchmarks means you have established SoPs, making it so much easier to evaluate your vendor teams, and thus drive change when needed. With standard benchmarks, you are empowered with the knowledge that helps you negotiate and course correct before issues escalate.

Is your vendor management team correctly staffed?

An inefficient outsourcing governance process could lead to overstaffing, resulting in the vendor team wasting time in collecting and making reports, when an automatic system can do the job much better. The time and effort can instead be directed at meaningful tasks which lead to actionable insights and enhanced performance.

Is accountability established?

Unless accountability is clearly established, at the end of the day, unfulfilled goals and missed deadlines can lead to a blame game. Rather, by implementing scientific and automated ways of creating service levels you will be in control of your precise goals. Every member at the vendor’s team will know their role and your project will flourish.

Keep this 5-point mantra in mind when scouting for outsourcing management services or evaluating your vendor.

To know more on how to build a robust outsourcing governance model, download the white paper Maximizing Outsourcing Value through Automated People Analytics @ Work