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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 & Recovery > Introduction

How to assess your BPO service or recover from a problematic relationship

This section focuses on the operational stage of BPO. The service is running. In the vast majority of cases, a BPO service will be at least fully acceptable and meeting expectations; Issues and necessary changes will be dealt with by the agreed governance processes and your Service Provider will be looking to encourage expansion of scope.

Of course there are a minority of cases where this is not the case. The service being received is not fit for purpose; not meeting business requirements; or there is a perception that it is not really value for money or market competitive in quality or price.

An in depth academic study of four cases of outsourcing identified the following as key issues in managing an outsourcing relationship:

  1. Inadequately specified contracts
  2. Mismatch between expectations and performance during transition period
  3. Challenge of managing different (corporate) cultures
  4. Poor communications processes
  5. Inadequate performance measurement and misaligned incentives
  6. The need for new management skills (for managing outsourcing)
  7. The Challenge of developing a high level of trust across a contractual boundary

This section provides an overview of how a situation of concern about performance can be dealt with:

  • Carrying out an assessment of the service including both provider and client areas.
  • Undertaking benchmarking
  • Making use of a mediation service
  • Re-negotiating an agreement
  • Making improvements to an existing service.
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