A clear framework is critical for outsourcing success

There are many reasons why organisations outsource their key functions. Customer service and seeking cost savings are high on the list.

The way an organisation approaches outsourcing will have an impact on the outcome for the organisation. Cost savings aren't a given, however, for organisations that get it right, not only can they save money, they can also achieve process improvements and better experiences for customers.

The relationship between a supplier and its client is the most important factor in determining whether an outsourcing agreement delivers the desired outcomes.

Achieving an outcome where both parties are successful will support a longer, and more fruitful, relationship. It will amplify cost efficiencies over time and allow for innovative solutions that respond to the needs of the business.

In our experience, the principles of the commercial framework are a critical foundation for how suppliers and clients work together. In partnership with our clients, we design to the following principles:

• We seek clarity on a client's key economic and strategic drivers in combination with understanding their vision to assist in designing a commercial and service solution that meets their needs
• Only the top two or three measures that deliver real value for the client form the core of the key performance indicator (KPI) structure — these KPIs then form the basis of the commercial terms and drive all focus and behaviour
• The core KPIs are supported by immediate and transparent reporting down to the agent level, allowing management of performance in real time
• We limit frequent changes to KPIs as this drives a dilution of management focus and creates agent confusion — targets can vary per quarter but should be limited in quantum of change (+/- five per cent)
• Targets need to be supported with clear evidence of benchmarking data to ensure achievability — setting unachievable targets does not serve anyone
• We set clear guidelines for managing change with account personnel on both teams, who assess any changes to process and KPIs with a view of the commercial impact and delivery outcomes
• To build a trusted relationship, we implement transparency on benchmarking and performance information for all internal and external centres
• We are geared for continuous improvement and partner with our clients to co-design significant change programmes that shift the dial
• We act with a social conscience and work to create shared value within the communities that we operate in — it motivates us that we make a positive impact in society, and our curiosity and desire to help organisations and communities
• We appreciate the power of connection and invest time in building relationships — better connections allow partnerships to thrive and create common understanding so we can harness collective intelligence for the greater good.

In any outsourcing agreement, we believe the clarity of expectations and goals is absolutely critical to success.

When suppliers and clients engage with a clear understanding of the objectives that are to be achieved, how success will be measured, and a willingness to invest in building an enduring relationship, that is when they will be successful in unlocking unrealised value.

James Johnstone is Datacom’s head of commercial strategy for our Connect business. He is passionate about combining his experience in IT and customer service to advise on how to improve the service experience for our client’s customers.