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And that’s why the majority of outsourcing occurs in support or administrative functions, such as IT, HR, communications, finance or customer support. It’s difficult to develop skilled, experienced in-house staffs in those areas, and although it’s possible, it may be a better use of time and resources to focus on your company’s product or service.
 

Needed: Involvement and Oversight
Unfortunately, too often companies enter into vague and unmonitored partnerships – primarily because they fail to view outsourcing as a critical management process. Thus, agreements aren’t detailed enough, expectations aren’t specified, measurement tools aren’t put into place and responsibilities are fuzzy.
 
To put it simply, outsourcing is just like delegating internally. There must ongoing management involvement and oversight to make sure work stays on track.
 
I recently helped a client salvage a struggling outsourcing relationship – one that was costing the company a great deal of time, money and customer confidence.
 
The main issues? The client had not explicitly defined the criteria that would be used to judge the partner’s performance and service. At the same time, the service provider had not outlined what was needed from the client company. The result was a disconnect that had both sides frustrated.
 
The first step in finding a solution was to clearly define what was needed for the relationship to be successful – from both parties. We specifically defined each side’s expectations.
 
Once that was complete, we clarified roles and responsibilities, and structured the tasks and processes necessary for work to flow smoothly.
 
The end product was a win-win for both the company and the outsourcing partner. Today, I’m proud to report, they are still happily “married.”
 

Follow the Keys to Success
The problems my client faced in maintaining an outsourcing relationship are all too common. But they don’t have to be. Follow these seven “keys to outsourcing success” and you’ll find that your relationships are more productive and profitable:
 

1. Include senior management. Involve senior management from your company – and from your outsourcing partner – to establish a shared view concerning the future shape and nature of the organization. Define the role outsourcing will play in realizing the organization’s strategies.
2. Ensure mutual benefit. Ensure that both parties benefit from the relationship by approaching your partnership as a strategic investment, not just a purchasing decision. Take time to understand and align the interests of both parties as the basis for trust and joint goals. Outsourcing is all about relationship management.
3. Modify your organization and processes. Restructure the organization and processes affected by the outsourcing arrangement. Design the mechanics of the relationship by rearranging the way the organization works as a result of the outsourcing. Attention to detail is essential!
4. Measure performance. Establish measurable goals and objectives. Create an unbiased, measurable scorecard in advance and use it as a keystone of the management process. Diligently track and measure performance, compare it to predefined performance standards (expectations) and provide feedback (both directions).
5. Maintain respect. Maintain mutual respect and learn from each other through open communication with affected parties. Have experienced people manage the relationship – people with personal, professional and economic incentives to make it work.
6. Plan for the unexpected. Define the process for escalating problems and negotiating changes and make them part of the regular, ongoing management of the relationship.
7. Put it in writing. Document the agreement in an appropriately structured contract.