How to Build a Successful Outsourcing Partnership

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Building a successful business process outsourcing (BPO) partnership with an external supplier, especially within a shared service operation, requires careful planning, collaboration, and ongoing management. Here are some simple steps to help you establish and maintain a successful BPO partnership:

Define clear objectives – the why?

In my experience, you must begin by clearly defining your organisation's objectives and what you aim to achieve through the BPO partnership. Establish specific goals, such as cost savings, improved efficiency, or access to specialised expertise. Investing time ensuring there is alignment with all stakeholders on the reasons you are embarking on a partnership, is time well spent, and will help ensure you remain on track further down the line.

Select the right partner that “fits” and do your homework

The vendor selection process is obviously crucial. Evaluate potential partners based on their experience, capabilities, financial stability, and cultural fit with your organisation. Be sure to check references and gather feedback from other organisations that have worked with the vendor that you select. And be aware that sales pitches don’t always translate into real-life delivery – challenge the vendor to demonstrate where they have built real solid partnerships with their clients.

Establish a robust SLA as the foundation of the partnership

Without a clear contract, a successful “partnership” is almost impossible. Develop a comprehensive contract that outlines roles, responsibilities, expectations, and deliverables. Define the SLAs that specify performance metrics, response times, and quality standards. It’s crucial that the vendor is fully aligned with what will be expected of them. You will want to be sure that the vendor has similar contracts in place already. If you are pioneering and breaking new ground in terms of their capabilities, this introduces risk. Finally, ensure the contract includes provisions for dispute resolution, termination clauses, and data security and privacy requirements.

Establish open and transparent communication

You need clear lines of communication between your organisation and any BPO provider. Regularly scheduled meetings and reporting mechanisms are essential.  Foster open and transparent communication to address issues, make adjustments, and ensure alignment with your goals. Governance can be your friend here - create a governance structure that includes representatives from both organisations. Define decision-making processes, escalation procedures, and roles and responsibilities within the partnership.

Share knowledge, train the partner and invest in continuous improvement

This is an area that very often doesn’t get the attention it deserves – and as a result, can seriously damage any outsource partnership. It’s absolutely crucial to facilitate the knowledge transfer from your organisation to the BPO partner. Provide detailed documentation, training, and access to necessary resources. Encourage ongoing training and development to keep the partner's team updated on industry trends and changes. In addition, you need to collectively foster a culture of continuous improvement. Encourage the BPO partner to identify opportunities for process optimisation, cost reduction, and enhanced service quality. In my experience, one of the most powerful building blocks is to implement a structured approach to process improvement, such as Lean Six Sigma methodologies.

Establish regular performance evaluation and a sense of teamwork

Conducting regular performance evaluations based on predefined KPIs and SLAs is absolutely key to a successful partnership. This is where partnerships can move beyond just contract deliverables and unlock additional value creation for your organisation. But it requires quality time to be invested from both sides. Use these evaluations to provide constructive feedback and identify areas for improvement. Establish a structured approach to conflict resolution. Define how disputes will be addressed, escalated, and resolved to minimise disruptions to operations.

Building a successful BPO partnership for your shared service operation requires ongoing attention and commitment from both parties. Regularly assess the partnership's effectiveness, make adjustments as needed, and focus on achieving your shared goals and objectives. Effective collaboration can lead to cost savings, improved efficiency, and enhanced service quality.