Outsourcing - Delivery View
Contract Management and
Delivery Management are
two sides of the same medal - one can not exist without the other. While the
Contract manager handles high level and financial issues, the delivery manager
has the duty to handle changes, escalations and projects.
We have tried to put the
essence
into this page.
Delivery Management is the attempt to create a successful team providing
services to the end-user ruled by a contract.
The Greek language has a good word for the necessary mindset: Xenos.
In the Greek language Xenos means "Foreigner" and "Guest" - actually it means
"The unknown person that becomes a guest/friend by entering the door!". In the
Greek culture there is no difference between a foreigner and a guest.
This mindset helps to establish a win-win-situation in an outsourcing deal.
Unfortunately the world is not ideal and companies more often than not focus on
"earning money" and not on "delivering service". Therefore the "Xenos"-approach
is only one side of the medal.
The other side of that medal is that the service provider also needs to
behave like a "Guest" and not like a "Robber". As always there is "trust" and
"control". The problem with control is that usually the outsourcer is the only
instance to deliver service level reporting. If you want to be in the driver
seat, you should make sure that you have the possibility to actually check the
correctness of the reported data.
The delivery manager has "his ear at the user". He needs to inform the
contract manager if reported and observed reality do not match. Together they
perform contract management. Depending on the magnitude of the outsourcing
scope, these two roles could be condensed in one person or span an entire
international department.
Contract Management is the challenge to live the described contract. It
involves:
- Governance
- Analyzing Service Level Reporting
- Financial Controlling
- Invoices
- Penalties / SLAs
- Conflict Management
- Outsourcer Motivation
- Escalation Management
- Make sure you have experienced delivery managers in your organization.
- Make sure that your delivery manager knows the contract in and out. -
Most supplier staff does not and usually requires some "hints" to actually
perform all contractual obligations.
- The "RTFM - Rule" (Read The Fine Manual) applies.
People with the ability to read have a clear advantage!
- If you really need to stress the contract, your outsourcing arrangement
is on the edge of failing.
- Getting an outsourcing deal to deliver smoothly requires at least 6
months until the outsourcer and the customer organization have adjusted pace
and expectations.
- Do not hesitate to educate and train your outsourcers' staff! - It will
be necessary to really get the benefit out of the deal.
- Make sure that you have IT-architecture and project management skills at
hand. - By default an outsourcing arrangement includes "hands" but is mostly
lacking "brains". This is due to the pricing arrangements that usually
specifies a (low) fixed hourly rate. That rate is very often too low to
allow the outsourcer to involve really qualified staff in the solutions to
your problems.
- Be aware that (large) outsourcing suppliers are usually good at
operating an existing environment according to clearly described rules. -
The change process has been an "alien concept" to all (large) outsourcing
suppliers we have worked with until now.
- Put a high emphasis on staff continuity. Otherwise the risk is high that
outsourcers' staff will rotate away as soon as they have been trained to
deliver according to your needs.
- Make sure that you have the possibility to check that the reported SLAs
actually reflect reality in case you get a feeling that experienced reality
and reported reality do not match.
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