Considering Outsourcing? Relationships Reduce Risk

Topics: Partnerships

Unless you're a hardened drifter in a spaghetti western, going it alone is not a very scalable or efficient strategy. If you think BIG but just aren't there yet, outsourcing some efforts to a vendor can help you achieve cheaper, better, faster or more responsive results. The real trick, though, is finding the right vendor and making sure your interests are aligned.

Why focus on the outsourcing relationship?

Many companies have built relationships with suppliers to cover a whole host of activities:

• Hosting, administering, and managing your learning systems
• Helping your subject matter experts to produce much more up-to-date content
• Designing curricula to address organizational changes

At the same time that outsourcing non-essential activities to a third-party reduces expense and overhead, shifting responsibilities to another party brings with it risks and costs. You can reduce this risk and reap the rewards of outsourcing by taking the time up front to set expectations with sound contracts.

Here are three important ways to build partner relationships that reduce risks:

Rule #1: Deal with a Reputable Partner

Due diligence here is critical as it costs you time and energy to switch if a vendor doesn't quite meet your needs, and should consider:

• operations (e.g., critical response approach, fluctuating payment currency, ability to scale);
• delivery (e,g., project management processes, expertise); and
• engagement (e.g., information protection approach, subcontracting).

Take the time to contact the vendor's former and current partners to get a sense of their strengths and limitations and to ensure that they are sustaining present relationships and growing. If you can arrange it, conduct a personal visit to the potential partner's facilities. No contract can substitute for a personal relationship and human intuition based on what you see. In fact, consider making personal visits throughout the term of a relationship to strengthen the ties between both parties.

Rule #2: Build a Balanced Outsourcing Model

In general, very few relationships thrive on minimal communication and interaction. Your model needs to balance quality, cost, and "customer" satisfaction. It must be based upon how much you can afford to manage these relationships; how you set expectations, define scope and communicate clarity around outcomes; and how you escalate matters for resolution whether in development or under maintenance warranty. An effective sourcing strategy balances the capabilities, risks, and benefits of geographies and teams to ensure risk mitigation and to deploy a global service delivery model.

Rule #3: Invest in Relationships to Build Trust

Remember that paying respect commands respect. Plan your operations so that all partners work as a single team, and get to know all of the members of your extended team. Make sure to recognize efforts and to celebrate successes and milestones as a team.

Conclusion

Not all non-essential activity is busy work -- it may just be work that your team may not be capable of delivering, such as updating the course catalog, making quick changes to meet business unit needs, or coming up with an innovative way to blend face-to-face training with an online social collaboration platform. Whatever the case may be, it's important to make sure that you find the right partner to leverage your organization's strengths and strategic direction.

This article supports the CorpU 12 Dimensions of Learning Excellence: Execute (Partnerships).