Published on 10/9/2006

It is always better to give a little now than to have to recover later from a sourcing deal gone under. Both parties should understand that outsourcing will probably not save money; it may bring expertise if you manage your deal to gain it. Here is the most important word. “Deal with it to manage it better” The same rule applies here too, if you need a better out come, it is ‘you’ who will do all the efforts. We are sure if you take trouble to build better relationship with your outsourcer, you will gain more profit than ever.

Missing a vital point:

Missing a vital point:

There are many clients who use outsourcing, some use it quite widely yet many of them are not happy with the relationship. How can everyone have made a muddle of contracting for their services? It is not possible you say. Yes! They are missing something else. In this article we would like to figure that “something” out of a closet. In our opinion they are missing this vital component and that is a proper management.

A client management:

Clients also need management so we better learn some proper management of our outsourcers. You have seen them spending lot of time dealing with issues in the relationship but have any one has shouldered the job of taking the relationship where it needs to go? “At better stage” just to name it.

The main reason:

You bet! If any of them have spent enough time rethinking their IT processes in order to deal with their outsourcers effectively, they are very few. Broken processes now span the two organizations, and delays are frequent. At the same time, too much is understood -- it\'s just expected that the outsourcer \"knows\" the client -- and not enough time is spent giving explanations, background and briefings on plans and expectations. Don’t you think this; is the main reason behind discontinued business relationships?

The solution:

Effective sourcing relationships are possible. They require a serious investment on the part of the buyer. It\'s not uncommon to see up to 7% of the outsourcing bill each year going to support internal relationship managers, service delivery managers, planners and the like. Sourcing relationships require that the buyer\'s overall organization become more coordinated and controlled so that a structured plan for services can be delivered and agreed to On the outsourcer\'s side, a similar commitment must be insisted upon and adhered to.

The rule of a game:

Better relationship is a two way process. Both buyer and outsourcer must work together on certain items. If there is a shortage of skills or labor in your region, this affects both of them. Though too much is given away by the supplier during negotiations in order to win the deal and so value-added services are required to grow the supplier\'s business. It is appropriate to buy some of these, where they make sense. It is also appropriate to continually reopen the list of services in the interest of migrating offerings that will be used repeatedly into the core services list, and perhaps moving low-usage items out into requirements of the moment or by helping the outsourcer recruit or retain staffers. There have been cases where an outsourcer\'s cost structure has been so compromised that deals have been terminated prematurely.