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As we saw in my last post, companies trying to rapidly transform their business in a few months to achieve higher productivity gains may be ill-advised. But by implementing a few simple steps to safeguard that transformation, they may not necessarily be wrong. Borrowing from Cynthia Batty’s insights on managing and working with your vendor, here are three more best practices in governance that you should keep in mind:
3) Invest in a governance data and workflow system
This one is actually a no-brainer. If you want the best results and highest efficiency, then you need good software to manage governance data and workflow. As Batty says, “Most companies that are more mature in multisourcing are still using Microsoft Excel and Access to manage their data and workflow, at great human cost in both hours and fatigue. Resist this approach.” This low-tech model may be acceptable if you’re only dealing with one service provider, since it’s not too difficult to keep track of workflow. However most large buy-side clients today deal with upwards of forty to fifty vendors for different services. With global multisourcing on that scale, your team cannot efficiently monitor critical aspects like project benchmarks. Invest in software to do it for them, and have them focus on functions that add real value.
4) Seek out and listen to experienced colleagues in other companies
Rapid business transformation is a risky goal, since it could very easily backfire. As Batty says, “Outsourcing will change everything about the way your company works, forever. Ask people who have been through it.” This refers not just to industry peers, but also analysts and consultants that have extensive expertise in implementing a new outsourcing strategy in a business. However while the advise you get will sometimes vary, your goals cannot. It’s critical to know clearly what your company should look like after the business transformation.
5) Follow your instincts to create meaningful organizational change management – and have a plan to look back
“Companies undergoing rapid transformation have a very high risk of changing too fast for the organization to absorb the changes,” says Batty. So that transformation needs to be carefully guided, and there must be a plan that your company is following. The key word is ‘integration’. Your outsourcing work and your in-house work are not isolated projects. Instead they should be seen as complimentary, and your vendor’s functions should be clearly aligned to your core competencies. Unlike what many buyers assume, this is not your vendor’s job – it’s yours to coordinate.
Maybe more important, once your company is transformed, you cannot slip back into the old ways of doing business. If that happens, you will never recoup the cost of that business transformation in the first place – and it is costly. Make sure you create a system of benchmarking progress, and consolidate each level of your operations.