A recent paper by Alsbridge, ranked top outsourcing advisor in the world, has highlighted the top 10 challenges companies must address to realize the full potential of their BPO services. This is particularly relevant given that many of the deals shaped in the first big wave of BPO in the 2000’s are coming up for renewal.
We’re happy to see another market leader highlighting the need for focus on outcome based contract agreements and ongoing governance maturity to realize the full potential from their contracts. The points resonate in the many discussions we have on both the buy-side and supply-side and confirm the need and interest in simple but effective sourcing governance solutions.
Particularly close to our hearts is the recognition that many organisations struggle with finding a way to facilitate the mindset and skill changes that are necessary to move from managing services and operations to managing suppliers and contracts. Alsbridge focusses on the need for collaboration and shared planning in the governance processes, involving the right people with the right knowledge and sourcing capabilities to get the most from BPO agreements. This is also why we strongly believe in managed governance services that provide the people, process and technology quickly and without fuss to increase the maturity and effectiveness governance.
Another area highlighted is the need for agreement clarity, both in terms of the business objectives you’re trying to realize, but also in terms of expectations on innovation, improvements, etc… Incentive mechanisms are also critical to examine. Leadmark can help address these challenges with our Sourcing for Value toolkit.
BPO renewal challenges
1. Clear view of world class – Do you have a detailed view and valid plan of the best to aim for?
2. Innovation clarity – Do you have the right insights, funding mechanisms and enablers to drive innovation?
3. Change & implementation expertise- Do you have the right skills to improve, even if you know what to change?
4. Governance – Are you measuring and managing the right things? Is there a shared plan for getting to the next level?
5. Incentivisation- Do you really understand how to incentivise the best client and supplier behaviours?
6. Pricing models – Does pricing support your objectives? Is transactional or outcomes-based pricing relevant?
7. Analytics – Are you making the most of the systems, business and social data available?
8. Benchmarking – Do you have the data to prove the supplier is still providing best value?
9. Retained organisation – Does the internal team have the skills and investment required to get the most out of BPO?
10. Remediation – Do you have a good way of identifying and resolving relationship weaknesses?