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By VP/Managing Director, Everest Group
For the last 10 years I bought outsourcing services as a buyer. As a senior executive for a Fortune 500 company, I was responsible for the company's outsourcing initiative that was part of a corporate turnaround. We utilized outsourcing to help achieve significant cost savings and performance improvements. Now I'm a senior consultant at the Everest Group, whose consultants have helped over 350 clients in the last 10 years develop business process outsourcing (BPO) strategies and solutions. I'm able to use my experience as a buyer to educate others new to the outsourcing process how to work with a consultant. I've distilled a decade of experience into these 10 tips. Why do outsourcing buyers need an outsourcing consultant? Buyers want the best outcome possible when handing over internal business processes to an outside company. Consultants bring their expertise, tools, knowledge of the vendor community, experience with developing solutions and strategies, governance, and transition to help their clients achieve an optimal outsourcing result. Typically, buyers do not have these skills internally. By using a consultant, buyers don't have to wrestle with a learning curve, eliminating the risks inherent in doing the job themselves. The follow tips should help buyers utilize the consultant's expertise to the maximum. 1. Manage both deliverables and expectations.Build a framework that clearly covers the scope of services you expect from the consultant. This framework should spell out the deliverables including pricing, timing, documentation, work process, and resources you, the buyer, must provide. Describe the intent and goals of what you want to accomplish. Remember you are buying professional services and expertise, not a single transaction, so goals and objectives are more important than specifics. In addition, make your expectations clear. Your consultants can help you with this. Buyers new to the process sometimes have expectations that are beyond the scope of the agreement. A frank discussion of what you really expect at the outset will help forge a better working relationship and outcome. 2. Provide full access to the organization.The company sponsor - the person behind the outsourcing initiative - must provide access to key people in the organization so the consultant can make an accurate assessment. The sponsor has the challenging job of opening doors, especially when there is internal resistance to change. Consultants are expensive; sponsors need to create an environment that makes use of the consultant's time as efficiently as possible. Do not limit the value the consultant can provide by limiting his access. 3. Let your staff know you are considering outsourcing.Most buyers have a natural apprehension about announcing an outsourcing assessment. Trying to hide the fact is understandable. No one wants to hear the "O" word. But it's a secret you just can't keep. In my experience, it's better to be up front and open. It can be damaging if the staff hears about the assessment from someone else and not management. That forces you to become reactive rather than proactive and conveys your leadership. It also allows you to make the business case for change. 4. Communicate with your consultant frequently.Because you are sailing in uncharted water, discuss problems, issues and concerns with your consultant often. Both the corporate sponsor and the consultant must understand the dynamics swirling around them so they can navigate past the sandbars. 5. Educate the consultant.Buyers must take the time to educate the consultant about the strategic, cultural and political idiosyncrasies of the organization. Education makes the consultant more effective; he has fewer land mines to avoid. 6. Don't jump to conclusions.Remain open and unbiased. Let the consultant determine the various solutions and strategies to solve your problem. For example, we often are asked to help a company that wants to outsource its IT. The executives are convinced that this is the best course. However, after assessing the situation, we discover overlapping functions and determine we can capture more value by leveraging IT and one or more other business processes. 7. Listen and learn.If you followed my advice from last month, you will have hired the right consultant. That firm has extensive experience in your outsourcing endeavor. You can maximize your investment by listening, learning and following your consultant's advice. Remember, they have "been there and done that." 8. Make the consultant a member of your team.Include the consultant as a valued member of your team. The consultant will be more effective if you view him as an insider, not an outsider. Position the consultant as your advisor, someone who deserves respect, access and influence. That helps him deal with functions and people in your organization. 9. Position the consultant as the gatekeeper with the suppliers.When you begin an outsourcing initiative, suppliers will try to gain access and favor within your organization - everywhere. Leverage your consultant by positioning him as your gatekeeper. Consultants have relationships with suppliers and have more experience with the supplier selection process (which can get squirrelly if you let it get out of hand). 10. Fund the project appropriately.Sometimes buyers volunteer their own staffers to gather data or provide cost modeling. Typically they do this to save money on the consultant's fee. In my experience, this approach seldom works. Buyer's employees have full time jobs and can rarely devote much time to help with the assessment. Allowing the consultant to do this work may cost more but will get the job done faster and usually more accurately. In the end this leads to better information and results. And that's why you hired the consultant in the first place. Next month I'll share my tips for maximizing the outcomes for suppliers. Stay tuned. Lessons from the Outsourcing Primer:My 10 tips are:
Publish Date: August 2001
For more information... Copyright © 2001 - Everest Partners, L.P.
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Last month I shared nine tips to help outsourcing buyers select an outsourcing consultant. However, that's not the end of the process, just the beginning. How do you work with an outsourcing consultant to maximize your investment in their services? This month I will share 10 tips from the outsourcing buyer's perspective. Next month I will address this question from a supplier's viewpoint.
