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How soft controls could help establish a successful and sustainable outsourcing partnership

Published on November 6, 2014 by Jacob Mario

Outsourcing strategies today focus increasingly on aspects of value creation that go beyond mere costs or defined tasks. Outsourcers seek partners who can help them derive real, sustainable and strategic business value from their outsourcing initiatives. What defines a successful outsourcing relationship is, therefore, not what is present in a contract in black-and-white, but how a partner is trusted or willing to go ‘above and beyond the call of duty’, so to speak.

No doubt that any commercial relationship is built on a clear, transparent, and unambiguously written contract, one in which visible and tangible hard controls such as SLAs, KPIs and escalation procedures, play an integral part. However, an outsourcing relationship, which is defined by the dominant use of such hard controls, risks overstressing guidelines, procedures and contractual commitments, rather than building mutual confidence and cooperation to achieve (much more than) agreed upon goals. After all, trust, collaboration and thinking outside the box are the real drivers of a sustainable and successful outsourcing partnership, not risk aversion or fulfilment of plain task-driven responsibilities.

This is where soft controls come in. Soft value-based controls (trust, openness, empowerment and shared values, or TOES for short) are significant in any outsourcing relationship as they inspire co-operation on mutually established goals, values and behaviour. A relationship based on trust, openness and transparency allows room for both the client and the service provider to look beyond the boundaries of a particular deliverable format or process stringency, and instead, think differently, unconventionally and from a new perspective. Many a time, there is reluctance to involve a client (or an outsourcee, as the case may be) while discussing a perplexing situation that may have a bearing on the engagement or broader outsourcing objective. In our experience, an honest, two-way communication about such dilemmas, challenges or situations, where things could have been or can be done better or differently, allows for issues to be identified and solved expeditiously. This is also how best practices are born.

It is also wise to empower an outsourcing partner, within practical boundaries, to go beyond their mandate and encourage dialogue on how shared values can be leveraged in a mutually beneficial manner. In any case, written rules can prove effective only against definite or predictable events, not ambiguous and unforeseen situations. Intangible as they are, soft controls help establish an informal atmosphere, which fosters open thinking to reach the common larger goal – not just meeting a defined delivery output or deadline. Quite often, outsourcing firms either do not care to look at or are not made privy to the ‘big picture’. Delivering a pre-defined number of simple sector profiles is fairly easy, but understanding their end use, and the part they play in a client’s overall strategy, can aid in a level of value addition that cannot otherwise be achieved. In an ideal engagement, clients must make an effort to involve offshore teams as often as possible in their relevant thought processes and objectives. The offshore team, on the other hand, should be in sync with the larger aim of providing insights that fit directly into the client’s overall business and outsourcing strategy. As with any partnership, it takes two to tango. Successful outsourcing engagements, invariably, see clients assuming an active role in fostering an open environment since they view the offshore team as an extension of their own. The offshore team’s motivation, in turn, receives a boost as they benefit from the client’s attention, encouragement, confidence and their active interest in grooming and developing the careers of professionals who may be miles away, but are considered part of the ‘team’.

A good outsourcing partner should be one that is able and willing to quickly move up the value chain in terms of scope and beyond mere transactional activities. At the same time, they also need sufficient trust reposed in them, which can be attained by balancing both hard and soft controls, to nurture a partnership in which the offshore team feels an equal weight of responsibility and has the freedom to experiment with new ideas for the success, not only of a particular outsourcing relationship, but of the client’s broader and longer-term strategic vision. It often requires courage in the outsourcing world to think beyond traditional ground rules and narrow delivery objectives, and instead, be guided by a clear vision to provide much more value to clients.

We, at Acuity Knowledge Partners, understand that outsourcing means much more to our clients than just a tactical means of cost control. Flexibility, transparency, understanding, creative thinking and, most importantly, trust, form the foundation of each of our engagements. That is why our clients rely on us to collaborate in their vision as we strive to make every engagement not just about executing delivery elements flawlessly, but about building long-term strategic values and partnerships that are not only sustainable, but also rewarding for both.

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About the Author

Jacob heads the Business and Research Content team at Acuity Knowledge Partners. He has over seven years of experience in setting-up and managing efficient and well-organized outsourced delivery processes for global financial and corporate clients. Based out of Our Gurgaon office, Jacob overseas research engagements across delivery centres and domains, including business research, company and sector profiling, financial media and editorial support. He previously worked with a KPO, where his responsibilities included managing market and business research engagements out of the India and Chile offices.

Jacob holds a Masters in Business Administration degree and a Bachelor of..Show More

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