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Outsource magazine: thought-leadership and outsourcing strategy | July 25, 2017

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The outsourcing conundrum: why does success still appear so elusive? (Part 2)

The outsourcing conundrum: why does success still appear so elusive? (Part 2)
David Wyer

To read Part 1 of this article, click here.

What to make of all this? We could be forgiven for suggesting that a different approach is necessary not only in the consideration of what to make vs buy but also in how we buy and then importantly how we manage – an approach that is cognisant of the old Gartner maxim “don’t outsource what you can’t manage” (at least that’s how I remember it).

I guess I have a slight frustration with the current set of trends – contract lifecycle management, service integration and management, supplier relationship management to mention just three – in that they champion doing the things that we’ve always done (or known we should do) but doing them better and more coherently and I’m not convinced given our experience (and the evidence), that carrying on doing more of the same is going to massively improve things. At times it can feel like I’m reading astrology in that as long as we do all the right things and do them very well then good things will happen. It’s too generic.

Perhaps way back in the ’80s The Eagles had a point?

“Same dances in the same old shoes
You get too careful with the steps you choose
you don’t care about winning but you don’t want to lose
After the thrill is gone”

Could it be that as the world of outsourcing becomes increasingly complex it’s time to be more radical as Tim Cummins (IACCM) often suggests? To loosen some of the contractual constraints accepting that this will introduce risk (where there’s risk there’s opportunity?) and inevitably increase the focus on post-agreement management. But  a move towards perhaps something more radical will be beset with obstacles, it’s worth a look at Tim’s blog.

In addition to perhaps not being overly ambitious we need to understand the importance of managing the complexity of the deal we’ve decided on – whether a traditional outsource governance regime is appropriate or would that only act as a barrier between customers and suppliers – and in the manner that we’ve determined would be most appropriate (strategic, transactional, etc). Once we’ve done that we need to ensure we give sufficient empowerment and support to the role managing the supplier, and the manner in which they carry it out, to prevent disintegration of the account governance.

I also wonder whether those involved in managing outsourced services should be allowed, encouraged, incentivised to be entrepreneurial in their approach. What I mean here is not only managing and of course mitigating the risk of failure but also managing and spotting opportunities, being quick to build on and make the most of successes. After all if we were running multi-million pound businesses that’s the only way we’d stay in business. Here again, just about every white paper on supplier management talks about stresses, strains and failures and how through a variety of tools, processes and training we will be better equipped to cope. I see very little talking about using success as a way of maintaining the relationship or even identifying an opportunity that may lead to a successful outcome. We all know how much harder life becomes as our stakeholders increasingly lose sight of the original reason for selecting our suppliers and perhaps cannot see how the transformation/vision will be delivered. A guide to good practice contract management was published back in 2008 by the Cabinet Office and has recently formed the criteria by which many central government departments were judged when it came to managing contracts. Again, read through and you may well find yourself nodding along – it’s all good and logical and right.

I don’t think there’s one right way or one right method for managing contracts: it’s an amalgamation of many different things and it constantly changes and we have to adapt. I once made the mistake of likening it to squeezing a balloon that has some water in it: it’s very difficult to be certain you’ve grasped it without it changing shape and requiring you change your grip. Now back to that wager: I win.

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