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Outsourcing

Companies have various reasons for outsourcing. What many companies fail to understand is that, in an outsource deal, two companies are getting "married". There is a saying that love is just a trick that God is using to kick-start a marriage - after that, it is just hard work. But the benefits are incredible!

Outsourcing is a practice that is done well at home and bad within business. There could be many reasons for this, but a few examples will make things quite clear:

  1. At home my garden maintenance is outsourced to the garden services. They know much more about plants and advise me on when certain plants needs to be trimmed, removed etc. BUT they will not remove a plant without my authorization. They will maintain the as-is situation, but as soon as there is something that will influence the long-term outcome or the general lay-out  of my garden, I get involved.

  2. At home my cleaning services are outsourced to the maid. This is not a very sophisticated process, but I still make sure by performing spot checks that the work was done properly. I even define priorities - especially when I expect guests.

  3. Building a home is much more specialized and outside my scope of expertise. But I still check on the workmanship every afternoon after work to make sure that the elementary things (like building the walls straight) have been done correctly. I do not know how to do it, but I can see when it is not done correctly

Then we get to work, we outsource certain functions / business processes and then sit back and hope for the best! Just as in the case of the building project it is not necessary for us to know as much about the business process that has been outsourced, but there are elementary things that we can and should check.

We as managers are sometimes too busy (or lazy) to manage the processes that have been outsourced. Even worse - we sometimes outsource a process and then leave the success of the outsourced business to chance.

Never outsource a process that you know nothing about. Get to know it first, then outsource it. You cannot manage something remotely unless you are fully aware of the nature of the business, the processes involved and the Key Performance indicators of these processes.

 

The big question

Is there a mismatch between the expectations and the actual services delivered? If you are the service provider, do you even know the answer to this question?

Whether our business is providing services or whether we are on the receiving end, the lack of excellence will cost us dearly. We need to take control over our business - even the part that has been outsourced to experts.

Management provides the environment in which the business operates. A management team that functions excellently will provide an environment that will cause their personnel and their business to grow excellently.

The Missing Link

It is time for us to find the missing link(s) within our businesses and put the necessary controls in place to ensure that the links stay in place. On this web site you will find various articles, challenges and ideas on how you can make sure that your delivery team is delivering according to expectations.

missing link1.png

 

The service industry is often driven from Sales. It is here where the expectations are created. Sales often tell customers what they want to hear and not what they need to hear for fear of loosing the deal. If this Sales team is not managed properly, it will be the start of a relationship in which the service department can never live up to the expectations that were created.

Then, after the Sales team, the Legal team arrives on site. They draw up a contract with the customer's Legal department, get all the legal jargon correct but unfortunately has no idea of what is technically possible or what expectations were created by the Sales team.

The frustrations that hit the service industry then stems from:

  • A badly written Service Level Agreement
  • Customer not understanding the process to be outsourced
  • The lack of proper Project Management to ensure the effective and efficient change-over from the current to the new
  • The lack of proper management (the old-fashioned Plan, Organize, Lead and Control) over the outsourced processes - "but they are the specialists and should know what they are doing" is too often the excuse.

 

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Last modified: 09/05/07