For as many years as I can care to remember now, I have talked about shared success as the key to making outsourcing work. Outsourcing should have been renamed partnership many years ago as the term still implies that one company is kicking some processes outside, implying that they are less important than those kept ‘in-house’.
But this is not a reality in most companies. Partners that specialise in specific processes will takeover components of the supply chain so that companies can focus on what business school call ‘core competences’ – their main focus. This has been true of processes like accounts and payroll for many years and more recently experts in HR and customer service have stepped in to help companies deliver those processes.
Outsourcing today is much more about a company coordinating a team of various experts to deliver the complete supply chain of services and the best way to make that work well is to ensure that every supplier has an interest in the success of the client.
This sounds obvious right? But look at how many outsourcing contracts were traditionally designed around payment by transaction. A simple example might be a contact centre that earns a fee for every call processed. If 50% of those calls are internal support calls asking for a password to be reset then it is in the interest of efficiency to design a better way to handle password resets. It’s not in the interest of the contact centre company though if they are earning on a per-call basis.
So how do we create an environment where clients and suppliers actually work together for the greater good of both organisations? How can goals and values be aligned when multiple organisations are working together? That’s the subject of a book called ‘Vested’ by Kate Vitasek and I’m proud to say that Teleperformance will be hosting a book signing session by Kate at the NOA Annual Symposium in London on June 22.
The book describes case studies featuring such companies as P&G, McDonalds, Microsoft, and Dell – all big global corporations. The case studies examine how outsourcing works better when a successful outcome is in the interest of both the client and the supplier, moving beyond the traditional idea of a powerful client and weak supplier.
In many cases, the processes that clients want to buy from suppliers today are so complex they can only be delivered internally at great expense. Look at how much the customer experience has changed in the past decade for a great example. Managing the customer journey today is about so much more than just managing a voice contact centre and smart companies realise this. They are not selecting suppliers because they offer cheap services. They are finding partners that can share values, share in business success, and provide the expertise that is lacking internally.
As I mentioned at the start, I have been talking about this change in the client-supplier relationship for a long time. I can see how outsourcing has changed over the years because I have been at the heart of negotiating dozens, maybe hundreds, of relationships. Kate’s book is a great way of capturing this change in a more detailed way, by documenting how major international companies are redefining what outsourcing means for them.
Please join us at the NOA Symposium on June 22 in London. You can click here for more details and do feel free to leave your own comments on vested outsourcing here.
Photo by Thomas Hawk licensed under Creative Commons.