Blog | 05.23.2016

Transform outsourcing governance- 4 powerful and tested tips

Earlier we spoke about the pitfalls of outsourcing your projects in Time and Material model. We highlighted lack of transparency, a false sense of control, escalating time and costs … and how a mature and robust outsourcing governance model can help address this.

It’s not that companies do not have an outsourcing governance program or team in place but the problem seems to be that most of the outsourcing governance programs are reactive, at best. T&M engagements are structured in such a way that the outsourcing governance team has access to data that is historical (time sheet, invoices, etc.), arriving to them at the end of the month/quarter. Other than auditing or reviewing of this data, the governance team or the vendor management team cannot do anything else, as that time has already passed.

As we discussed in the previous blog, the key in T&M engagement is to get real time visibility in order to make the most of the time of the talent (which you are paying for) and to get the business outcome you desire from the engagement. To effectively address the mentioned challenges, the outsourcing governance function needs to be proactive and not reactive.

By revising your outsourcing governance model and having access to actionable data, it is possible to create a seamless process that works for your company and your vendor.

Here are four points to keep in mind when revising your outsourcing governance model:

Tip #1: Automated and accurate data

We’ve already spoken about how delayed data is worthless data. Manually gathered, collated and shared, it is a whole lot of time wasted and is never accurate. It might offer some learning for a future exercise, but more often than not, with the fluid nature of work and projects, it really does nothing.

With the right tools, this process speeds up and offers you accurate data, when it is needed, helping you stay in control of your project and step in when needed before it becomes too late and a costly rework.

Tip #2: Real time visibility

Imagine a scenario where you can ‘see’ which team is working efficiently and which isn’t, irrespective of geographies, and how the work is progressing against the project plan. Are there structural issues which are making your vendor team inadvertently spend more time on non-productive work (meetings, emails, etc.) than on your actual work? Are the team’s priorities aligned to yours? Perhaps they’ve not understood your exact requirements and are spending more time on non-core issues. Did all the things at your end happen on time to enable to success of the vendor team?

Automated real time visibility and its mapping against the project plan, actions and deliverables is the best way of converting the outsourcing governance model from reactive to proactive.

Tip #3: Strong SLAs for your organization

Your vendor and you need to be on common ground. It wouldn’t do to have the vendor’s team’s efforts focus on goals that aren’t in synch with your outsourcing objectives. Moreover, with multiple teams at the vendor’s side, there could be an overlap or worse, teams could be working in silo. Are there ways to create innovative SLAs and metrics that are beyond the simple time sheet?

Innovative & Strong SLAs around resource utilization, time of core work, etc. ensure the T&M engagement works in accordance with your outsourcing goals. These SLAs establish the baseline for creating pay-for-performance models that benefit both sides. The vendor can focus on efficiency while also meeting your goals. And you remain in control of the performance and pay as per the result. If any discrepancies are noticed, either side can take action and resolve the issue proactively.

Tip #4: Ease of running the program

Typically, outsourcing governance models rely on multiple data sources in multiple formats that then need to be collated, processed and analysed. This not only takes up time, but the end result is rarely of any use because it represents past performance.

What your organisation needs is a tool that provides automated and objective data in a dashboard format for easy review and analysis. Faster analysis leads to faster troubleshooting and course correction, in a proactive manner.

To know how to iron out vendor management kinks and build a robust data-driven outsourcing governance model, download the white paper Maximizing Outsourcing Value through Automated People Analytics @ Work.