7 Steps to Successful Outsourcing Partnerships

7 Steps to Successful Outsourcing Partnerships

The Request for Proposal (RFP) is usually the first step to selecting and procuring a new outsourcing solution with a service provider, followed by quotation, consultation and purchase. Outsourcing partnerships require a smart communication strategy that begins during the RFP phase, and develops through the BPO transition phase to safeguard business continuity. Outsourcing solutions can be crucial to enabling organisations to provide a better customer experience, deliver operational efficiencies and reduce costs. Here are some of the key steps we’ve identified in creating successful outsourcing partnerships.


  1. Align outsourcing with strategic business vision

What are the critical elements of your outsourcing needs? How will they help you achieve your business vision? Answering these questions will support clarity in your negotiations with a third-party provider and also when defining the Service Level Agreement (SLA). If one of your strategic goals is to enter new European markets, consider which markets will be most viable for your business and give yourself a timeframe, for example: enter new markets in Ireland, UK, Hungary, Poland by [year]. Then you can shortlist outsourcing providers who have the expertise and talent in those markets. Other strategic goals might be to improve customer experience or your back office transactions process:

  • Reduce customer wait times from 8 minutes to 4 minutes within 18 months.
  • Increase first call resolution from 72% to 80% within 3 months
  • Reduce accounts receivable from 60 days to 30 days within 6 months.

Once your outsourcing shortlist is created, requesting case studies from the BPO or managed solutions providers can assist with your research. This allows you to find out more about how they’ve supported their clients in meeting strategic goals, like yours.


  1. Invest time and effort in the consultative stage

Developing a strong partnership with your outsourcing provider, and together, identifying the job to be done, involves a considerable learning process. Once your vendor understands your organisational values, it’s easier for them to align the right talent with your organisational needs. For example, you may need a new, fully managed contact centre solution, to cross-sell your products to existing clients in Germany. Let’s say you require: 50 German-speaking customer service associates.

  • What type of background and experience will these people have?
  • Where will they be currently based?
  • What training will be provided, and its frequency?
  • What will the KPIs be?

By educating your vendor on how your business model works, and the standards of performance needed to help you deliver against your objectives—together, you can develop a clear vision of what success looks like. Invest the time to test, stress test, and troubleshoot issues that could arise, therefore minimising the chance of confusion about each party’s role in the future. There is no substitute for upfront planning, scope and objectives. Have you provided enough in-depth information so that your supplier can design their service model around it? Your Managed Solutions or BPO Provider will appreciate your detailed input and it will help to set firm foundations for a strong partnership.


  1. Drive stakeholder buy-in

Getting your key stakeholders on board improves the likelihood of reaching contract agreement. Once stakeholders understand the value of the solution, it’s easier to drive buy-in. Regularly updating your stakeholders on developments, addressing their queries and tracking their feedback will enable you to identify delays in the agreement process. It will also highlight any need for additional information in order to keep things moving. Keeping your CFO informed and aware of changes to the proposed budget will help you to manage the process and negotiations, maintain “buy-in”, and prevent surprises in the final negotiations stage. It’s crucial that leaders and stakeholders are involved in the selection process, and that they continue to play an active role in developing the new partnership to its full potential.


  1. Determine the scope of work, service level and pricing model

A reliable SLA details the scope of services the vendor will be responsible for, exactly what their responsibilities will be, and it clearly defines the metrics, expectations and accountabilities. Either party can refer to the SLA for confirmation any time. A contract without a robust SLA won’t provide the level of information needed to explain key factors such as service delivery and customer satisfaction goals. It’s important that the vendor understands exactly how you communicate with your customers, so customers have the same experience with the vendor as when they deal directly with the organisation. The pricing model will enable both parties to understand the significance of volume fluctuations in terms of staff, hours or shifts, thereby reducing the need for re-negotiations, hence avoiding delays in carrying out the service level agreement.


  1. Co-create solutions

To lay down the framework for a successful project, co-create solutions with your outsource provider and agree the project expectations. An outsider’s perspective can bring new, innovative ideas. Without regular communication, priorities can be­ misaligned, and it can impede decision-making. The processes you define and implement during the hand-off should clarify your expectations. By co-creating, developing and revisiting solutions over time, any process or delivery issues will be picked up and rectified quickly.


  1. Manage change

Consider the possible scenarios where change may occur over time and put measures in place to deal with it. The more advance thought given to this, the better your partnership is likely to be⁠—because you’ll have accounted for unforeseen circumstances that could affect the scope or cost of your agreement. In our experience of a multi-client environment at Covalen, we understand that SLA’s will vary from time to time. This happens when new customer offerings are introduced, or by re-negotiation of existing products. We easily adapt by following a clear quality process from the start. Changes are managed though our quality change management cycle which allows modification, approval and the  launch of any changes to our employees in a timely manner. Using this change management process, we continue to drive the agreed KPIs and focus areas set by our client. The quality measurements are aligned with KPIs to drive sales and service agreements.


  1. Continually invest in the relationship

With significant outsourcing projects, it’s important to keep the lines of communication open and allow innovative ideas to flourish. According to Andy McKie, Business Development Director at Covalen. “Partnership co-creation supports a process of continuous innovation and improvement. Before signing any contract or SLA, we arrange a series of workshops to develop our client relationship and let ideas flow freely”. Executive level support and guidance from the business to the vendor is particularly important in the early stages of the contract agreement. This enables a smooth transition while the vendor is acquiring knowledge⁠—and a leadership support system where challenges can be discussed and resolved. It also helps to build trust and develop a long-term, successful partnership. 

If you’d like to read more on the topic of Outsourcing, see our blog – Sustaining Company Culture in Customer Service Outsourcing: The Challenges.


Sustaining Company Culture in Customer Service Outsourcing: The Challenges

Sustaining Company Culture in Customer Service Outsourcing: The Challenges

By Davina Greene.                                                                                                                                                                                                             Image by Robert Bye.

To outsource or not to outsource? A question that crops up from time to time yet making a decision to outsource to a professional provider shouldn’t be daunting one. Why? By moving a function or a process to a customer service outsourcing partner—you can balance your practical needs and focus on your core business.

More recently, the conversation has extended beyond the practical, the mere ‘work to be done’. Integration of client company culture within the outsourcing business is now a frequent, and valuable, discussion point.


The traditional view

Only a decade ago, outsourcing was considered something a substantial company did—opting to outsource its least-loved functions somewhere else, without too much consideration into where it was, or how it operated—if it remained economically advantageous and generally reliable.

Those days are not entirely gone, but the conversation has changed. As an outsourcing business we know that certain companies have comprehensive employee engagement plans, while others won’t notice their absence at an outsourcing site because the partnership focus is the provision of agreed work, to high-quality standards. In such cases, company culture is an internal agenda that stretches throughout locations, but not outside of the organisation. In the outsourcing world, there is absolutely nothing wrong with this approach. In fact, it remains the most common.


The new world

In contrast, some businesses—often the larger, international organisations who have integrated teams across buildings and borders—have seen the merits of engagement programmes and enhanced working environments (and maybe even a little bit of pampering). Such companies may feel compelled to carry that forward. If a customer service outsourcing partner is ultimately going to contribute to its overall success, their staff should expect to experience these HQ-style perks too. This way, the company culture can carry through to the vendor as an extension of the client business.

This is a very nice position to be in at the start of an outsourcing relationship, with engagement, fun, and wellbeing central to reaching desired results. If that’s your position as a potential outsourcing buyer, then how might you make your customer service outsourcing partner more like an extension of your business?


Extension by objects

As you explore your outsourcing partner’s premises, you may like the idea of colours, posters, or other décor that mimics your business. You may even have a desire for internal branding or furniture that resembles that of your HQ, or the provision of the same snacks and beverages.

You may wonder about extending engagement initiatives including those that require significant tangible prizes or financial rewards—an idea is an idea, a mood-boost is a mood-boost, even if it extends outside of your workforce, to your suppliers.

These are all nice things to suggest, and indeed makes sense in terms of morale, brand association and reputation management.

Most of the above, however, require some (or a lot of) financial investment, which will of course necessitate deeper discussions about ownership. All the more reason to remember that you can spread much of your company culture without spending a cent.


Extension by values

If your culture is one of Creativity or Collaboration and you’ve already reaped the internal benefits of creating space for that in your employees’ working week, then why not extend these benefits? Perhaps pulling both teams closer together through inclusion in intranets and chatrooms would be beneficial at grass-roots level. And perhaps, sharing some high-level plans, simply letting your outsourced team know what’s coming next. This also helps if your success to date has been grounded in Values like Trust, Engagement or Openness.

If your culture is one of Accountability, consider how to build that in—for example, not only in making the new outsourced team accountable, but in defining carefully-framed responsibilities across the BPO and the HQ.

There may be other non-traditional aspects of your business that you seek to introduce, for example, high levels of management transparency, consensus-style decision-making… whatever you feel works well within your current organisational structure.


The reality

Quite simply, not every vision you have for your cultural alignment may be possible in practical or financial terms.

Firstly, your customer service outsourcing partner probably has employees working for various clients on-site. And just as you have HR policies in relation to staff equality, employee engagement, and so forth, so does your outsourcing partner. If part of their team is offered a noticeably different working environment, or reward level to others, it could negatively impact morale throughout their site.

Secondly, remember that what works for one group of people may not work as effectively for another. The type of people who occupy your head office may be very different to the people who occupy the outsourcing business. This is something to evaluate if you make a decision in favour of outsourcing. If your HQ comprises of minimally-managed creative-types, while your outsourcing partner’s team are high energy types, making high-volume phone calls—these different kinds of people may value and prioritise different things. A professional outsourcing provider will work with you to find a middle ground. Or maybe, simply to advise and reassure you that their internal culture and engagement planning is already ‘just right’.

Finally, consider that your customer service outsourcing provider obtains efficiencies from reapplying certain processes and procedures time and time again, and managing a certain type of staff and processes in a certain kind of way. It’s why you selected them in the first place. So, to simplify your own life­­—have trust in their knowledge and expertise. Let them impress you!


– What look and feel do you want your outsourcing partner to have? Be clear on the what and the why from the outset.

– Be mindful that your outsourcer must manage its people in the best way possible relating to the nature of their work.

– Consider that the culture at the outsourcing company might be a good match for your needs, even if unfamiliar to you.

– Consider the softer, more beneficial ways of developing the relationship, for example, today many companies value an innovation culture above high-end interior decor.