As I speak with outsourcing
service providers and their Clients, I tend to look for points of similarity
and difference. That’s one way that I
try to deduce the trends and find the nuances worthy of greater
inspection. I am finding that there are
more points of similarity than uniqueness across the ITO and BPO provider
community.
One particular
characteristic that I’ve found to be prevalent is the lack of “economic game plans”
for existing outsourcing arrangements.
It wasn’t too long ago
that this art was central to the Account Planning techniques of most of the major
service providers. In the best of
situations, the Economic Game Plan was a document that was openly shared with
the Client.
The elements of the
EGP aren’t especially complicated or obscure.
They include:
Ø Volume forecasts for contracted services
Ø Cost transformation projections to yield
efficiencies
Ø New service projections – timing, pricing, and
volumes
By reviewing these
metrics between and among the provider and Client, both parties were able to
minimize surprises and align expectations.
It was also the forum for candidly discussing changes to volumes for
future periods – enabling better cost and revenue forecasting by both parties.Lacking these open conversations, a Client might be left wondering why the service provider is taking certain actions … whether those action are to reduce costs or promote new sources of revenue.
Conversely, if the
service provider is planning and acting without the benefit of alignment with
the Client, the guesswork may yield disappointing results.
I’m not quite sure why
this technique has faded from the management toolkit. There once was a day when Clients insisted on
the transparency and, quite frankly, the providers rejoiced in the opportunity
to receive feedback on their plans.
Without bilateral
EGPs, each party is left to surmise what the other is intending. That’s not a healthy situation, and rarely
does it come to pass that both are correct.
To be fair, a few
service providers tell me that this discipline is central to their management
models. But, I’m not convinced that
their Clients see the situation in the same light.
Peter