Friday, May 13, 2005

outsourcing and management relationship

Importance of outsourcing relationships
Managing the outsourcing relationships is important since they ensure what and how much are we able to get from the investment made and to offer bet services to our customers. Thus the relationship with the software outsourcing service provider becomes the key for a successful outsourcing transaction.

Growing dissatisfaction
Too much pressure on both sides of the business is making a lot of dissatisfaction among the outsourcing partners. This dissatisfaction can be attributed to a number of causes, related to both the parties' to outsourcing.
• Unreachable targets due to over promising during sales process.
• Over expectancy of the clients and the clients.
• Rigidness in the behavior not changing according to the environment.
• Cultural gap.
Outsourcing should not be treated as a contract between the two parties but as a relationship among two partners. Successful outsourcing relationship requires a lot of professionalism and good management.

Managing the relationship right at the start
The step for making the relationship successful among the outsourcing partners starts right by the way the objectives are defined, the requirements are laid and the way the search for a new vendor starts. The people who are selected to manage the relationship are also of prime importance. Continuous improvement should be defined and expected.
Managing successful relationships requires a new breed of managers
The success of outsourcing depends on the managerial skills rather than the technical or operational knowledge. The various skills which are required to be possessed for having a successful outsourcing relationship are as below:
• Negotiation skills: To negotiate on a day-to-day basis to keep the services provided in line with the services required.
• Communication skills: Outsourcing managers are basically a bridge between the organization's business needs and the providers' services. Communication becomes the essence of a successful outsourcing relationship.
• Business skills: To continually understand the changing business needs and aligning the services as per the business objectives.

Involvement of top management
The relationship can be improved if we involve out top management for reviewing the relationship and giving it a proper direction. Senior management should play a vital role in communicating the reasons and results of outsourcing across the company. This can be hard work for the management if it is required to make the relationship do well.