MT Expert - Innovation: How to be best buddies with your outsourcing partners

Having a good relationship with your outsourcer is vital if you want business to run smoothly, says Accenture's Anoop Sagoo.

by MT Staff
Last Updated: 09 Oct 2013
Over the past 20 years, outsourcing has become essential to many businesses. Traditionally, outsourcing is supposed to create greater efficiency, streamlined operations and lower cost. These days, though, businesses expect more from their outsourcing relationships: they want innovation, industry expertise, and solutions tailored to them.

Accenture conducted a study with Everest Group and The Outsourcing Unit at The London School of Economics to explore what separates the best-performing outsourcing relationships from the rest.

The study found that the full business value of outsourcing is usually realised on a relatively small scale. About 60% of businesses still regard it as a cost-reduction tool. Just 20% of those surveyed have seized the opportunities are classified as high performers – those getting as much value as possible out of their relationships. They’re the ones that demonstrate the best practices across seven areas:
  • Collaboration: they adopt a partnership-based approach
  • Change is a priority: Planning it carefully means they can manage the effects of change across the enterprise, during transition and beyond
  • Value beyond cost: They focus on benefits beyond cost reduction, and make balanced sourcing decisions
  • Business outcomes: They target strategic and measurable outcomes, not just more efficient transactions and structure their contracts to incentivise those outcomes
  • Expertise and analysis: High performers turn to providers with deep industry knowledge and the ability to analyse data, which means they can predict business outcomes more easily
  • Transformation: They place importance how the outsourced process affects the internal workings of the client
  • Technology as an enabler: They recognise that technology is the source of innovation and advantage

Encouragingly enough, the research shows these is attainable for all organisations, thus isn’t dependent on size, industry, geography, tenure or business function involved. It’s the manner in which the outsourcing arrangement is planned, established, managed and monitored that matters.

Businesses need to adopt these practices to ensure they’re realising the best possible results.  Those that continue to view outsourcing purely in terms of cost could face challenges from their more progressive rivals. 

- Anoop Sagoo is the BPO cross operating group lead at Accenture

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