Are you in a relationship with wrong IT Offshore Outsourcing company?

May 11, 2016 12:31 pm | Updated 5 months ago.

In today’ scenario, Offshore Outsourcing is looked at more as a strategic initiative towards Business Transformation of an organization, rather than just being a cost saving initiative. In this scenario, therefore, the relationship between the customer and the offshore outsourcing vendor becomes extremely critical. In this article, we will first look at what steps are taken in the current traditional model to build the relationship between the customer and the vendor and how the Offshore Outsourcing Aggregators are bringing transformational changes to this process of building strategic relationships.
A. What factors Customers look for in an Outsourcing Partner: Most customers start the process with looking for Offshore Outsourcing vendors that meet the following high-level criteria:
i. Does the vendor have a good track record of delivering complex projects?
ii. Does the vendor have a good reputation in its area of excellence?
iii. Is the attitude of the vendor’ management team compatible with that of the customer’ organization?
iv. Does the managerial and technical team presented by the vendor look competent to handle the engagement?
v. Does the vendor have ISO9001 or CMMi or other international certifications?
vi. Was the vendor management team open during the discussions with the customer and did the vendor management team display a sense of integrity?
B. What factor make a good relationship between the Customer and the Outsourcing Partner: Having discussed what the customers typically look for in an Outsourcing Partner, let us now look at what are the parameters that are significant for a good relationship to evolve as the engagement progresses:
i. Right Size: The size of the vendor relative to the size of the customer does matter. As a ballpark, the customer should be within the top 25% percentile of the vendor’ client base to be able to get adequate management attention.
ii. The match in style, values and culture: It is important that there is a good match between the value system of the customer and the outsourcing partner. The style of operation and the culture should be similar, but some minor gaps can be worked out thru training that we will talk about next.
iii. Thought Leadership: The vendor needs to demonstrate thought leadership in executing the engagement, rather than simply being an order taker. There may be occasions where the vendor says “No” the recommendations from the customer, but if the right reasons are given then the customer team appreciates this better than the vendor simply saying “Yes” to everything that the customer asks for. These demonstrations of thought leadership by the vendor team in addressing the technical and business issues of the customer lays a strong foundation for building a long-term relationship.
iv. Alignment to Business Objectives and Goals: For a strong relationship to develop, it is important that the vendor is aligned to the business objectives and the goals of the client and continuously asks questions and develops solutions to meet these goals and objectives.
C. Training Required to make the relationship work: Having looked at the parameters that are significant to develop a relationship, let us now look at what training may be needed for both the Customer team and the Vendor team to make the relationship work:
i. Offshoring risk assessment and management: Both the teams need to understand the risks arising due to distance and need to plan for training to mitigate the risks including communication infrastructure, regular reporting to manage the risks, virtual teamwork etc.
ii. Cross-cultural communication and cross-cultural negotiations: The management teams of both the customer and the vendor organizations need to understand the risks arising from cultural differences and need to plan for training both the teams in managing cross-cultural differences.
iii. Knowledge transfer techniques: For the vendor to be able to deliver successfully and then build a long lasting relationship, it is critical that they understand the business of the customer. For this to happen, proper training on knowledge transfer techniques from the customer team to the vendor team needs to be planned.
D. Outsourcing Services Aggregator: As the offshore outsourcing industry transforms gradually towards an Aggregator model, similar to Uber and Airbnb, the Aggregator platform needs to have built in mechanism to address all of the above factors that are critical to build and maintain a long-term relationship between the Customer and the Vendor. The Aggregator platform of D2E Consulting has the necessary features to do so.