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Outsourcing Fundamentals

Independent guide to Outsourcing: BPO strategy, Service Provider selection, contracting and implementation projects. Assessing and improving your current service.

Review & Recover > Improvement

Making Improvement and Managing the Change

A static BPO service is rarely satisfactory. Improvement and continuing change to a service is vital for it to stay in line with business requirements and priorities. The contract with your provider should define how you go about agreeing and making changes, but will not necessarily provide all the procedures you need. Do review your contractual rights and obligations before making changes to how you go about managing change. Your provider should agree to work with most of these points even if not stipulated in the contract.

Managing change carefully is important:

New business requirements may need changes to volumes, or service levels; It may be important to increase or decrease the scope of activities, the geography covered, the technology used; or a change in the client internal organisation may require changes in communications.

Your Service Provider capability should develop over the term of the agreement and you may wish to take advantage of the potential improvements.

Any changes made brings some risk to the operation of the business. The impact needs to be assessed and the process and timing of introduction aligned with business operation and any other changes going on.

Large changes, or multiple small changes, can have an impact on the value for money of the overall service.

The service, after each change made, must still have sound operational, commercial and contractual documentation. You should have an audit trail to support analysis of any problems introduced by a change.

Improvement Types

Often, change is often split into the following categories:

  • Continuous Improvement does not alter the pricing and is not charged to the client. A service provider's proposal to win your business often includes making the activity more efficient over the period of the term. The client benefit of the improvements is locked into the pricing proposal, either as an annual reduction or as overall lower rates. This means that the provider must make changes to their provision of service and the client gets no additional benefit for the changes. The nature of the changes must be such that they have no negative impact on the service and cause no or minimal change to how the service is used.
  • A compulsory change may have a charge for implementation or change the pricing, but cannot be refused. A change may be classified as compulsory because it is driven by a change in legislation, by a necessary upgrade of system software, or indeed a change in the client's policy or business if this has been catered for in the contract.
  • All other changes, which may be proposed by either client or service provider, are by agreement of both parties

Managing the changes

The process for managing changes, Change Control, needs to allow either party to make an initial proposal and both parties to evaluate the impact. The process needs to cater for urgent requirements while allowing normal changes to be brought in carefully and no change to be made without being properly considered and authorized. In designing the process, give thought to any requirement to cater for locally driven requests and the degree to which the service can be kept consistent.

Below is the outline of change framework which I provide primarily to check that you have a reasonable process in place:

Have an annual planning meeting

It is valuable to have an annual meeting devoted to improvement and other changes. The previous year can be reviewed; the Service Provider can present any new business processes, technology and improvements that relate to the Services. The client can describe known business changes that may have an impact on requirements. In some agreements there is an obligation on the provider to propose a programme of improvements

The change Control Process

  1. Change initiation: To avoid chaos, only one or two people from the client and service provider should be able to initiate the change control process, submitting a change proposal. A proposal from the client should include sufficient information to allow the service provider to make an estimate of implementation costs and any changes to service levels and pricing.
  2. Logging the change proposal: One person or role should have responsibility for keeping track of change proposals, logging the status and keeping the process going according to agreed timing.
  3. Early refinement: It is useful to have early discussion. This may have happened before a formal proposal has been made, but the process should allow for suggestions and refinement before the change assessment.
  4. Change assessment: Changes can be relatively minor. Others will need a full assessment covering implementation costs, their effect on scope of services, service levels, service resources, and the contract. There should always be an assessment of risk to operations and of the implementation plan.
  5. Review and decision: The change control process must include a very clear point at which proposals are approved, rejected or sent back for rework. Both client and service provider must have agreed on operational and commercial considerations before proceeding. An exception to this rule may be for compulsory changes, where implementation may be urgent and commercial considerations dealt with subsequently.
  6. Implementation and tracking: Completing the process, the implementation plan is put into action and the change tracked through to operation including updates to operational and commercial procedures and documentation.

Fast Track Changes: It is usual for there to be provision for making urgent changes, where, by agreement of both client and service provider, the change control process is short cut, but not without proper approvals.