The dependence on service providers for delivery of services is on the rise. More and more IT and BPO leaders are realising that timely execution of strategic programs to meet business needs is an uphill task and requires matured sourcing practices. Over the last decade several organisations embarked on an outsourcing-led transformation; several of these initiatives failed to deliver the expected value as many underestimated the complexity and skills required in executing the outsourcing strategy. The leading cause was they failed to take a long-term view and answer critical questions:
– How do you maximise value and bring forward sustainable enterprise improvements from outsourcing initiatives?
– How do you integrate outsourcing with the usual business of the organisation?
– How do you calibrate the pace of outsourcing-led transformation while balancing your company culture, operating model and business objectives?
– How do you assess the level of complexity and take a structured approach to achieving the outsourcing goals?
– How do you maximise success and balance that with the myth of excellence?
The companies that succeeded had invested in building a business-led strategy, strong governance, investments in mature outsourcing competencies, and dedicated outsourcing management organisation (Program Management Office, PMO). Most importantly, they recognised outsourcing management as a key differentiator and core competence.
What is outsourcing management as a service? outsource
In practice, outsourcing management can be successfully done as a service supported by blend of strategic and operational competencies. Outsourcing competencies are a cluster of related abilities, commitments, knowledge, and the skills that enable an organisation to act effectively in a job or situation. They signify the measure of the ability of an entity (department, organisation, person, and system), especially in relation to the overall outsourcing objectives.
Creating a meaningful, sustainable and high-value outsourcing impact will require enterprises to evolve matured outsourcing competencies. These would need to be extended to clients as well as providers. In the absence of mature outsourcing competencies, outsourcing experience can be frustrating for internal clients as well as vendors. Some of these processes may exist in buyer environments but they may not have been structured as competencies and positioned for continuous improvements.
Building and nurturing external and internal relationships requires that organisations evolve services and processes as subset of competencies to provide a positive outsourcing experience to customers and service providers. Implementing a “competency-based service catalogue” will be critical to providing a structured view to clients and vendors. Clients need to service providers also in addition to internal outsourcing users otherwise vendors won’t be able to deliver the expected value. “Outsourcing management as a service” will build mutual trust, keep vendors and outsourcing users strategically aligned and make it a win-win for both clients and providers.