5 steps to make outsourcing successful5 stappen om outsoucing succesvol te maken5 steg för att göra outsourcing mer framgångsrikt5 Schritte, um Outsourcing erfolgreich zu machen
I recently heard a great presentation of Amanda Crouch, partner at Global Business Partnership Alliance .She identified 7 steps that lead to real collaboration in an outsourcing relationship.
An interesting statistic that underscores the importance of ‘relationships’: 70% of performance/delivery problems have relational root causes. On top of that, a United Nations 2010 study shows:
- 80% failure rate for an ad hoc collaborative approach
- 80% success by investing in collaborative capability
- 50% of alliances and partnerships fail
An important question is ‘what do you mean by collaboration?’ Wikipedia says: Collaboration is working together to achieve a goal, a deep, collective, determination to reach an identical objective. This ‘objective’ is thus at the center of any collaboration; the purpose, vision and objectives should be clear to all people involved.
Amanda Crouch has developed a framework to picture the 4 levels involved in creating ‘collaboration’, with the objective in the center as the starting point:
What I find most striking about the model is that it focuses mainly on the ‘soft side’ of cooperation: the people and the relationships. Instead of directing attention to systems, tasks, operational procedures and rules, the research shows that we can improve results by making better connections on a human level. We need to ensure that all people involved look in the same direction, work towards the same objective, share a certain mindset (values) and show certain behavior.
The purpose of the cooperation then becomes collaboration instead of ‘finding a partner that says yes sir, no sir’. The mindset becomes ‘teamwork and empathy’ instead of competition and challenge’. The central ingredient becomes ‘trust’. We can understand the level of trust from the terminology used: 
To increase the chances of success in collaboration, we need to focus on 5 steps:
1.Change – Purpose, values and believes, capability, environment
2.Invest – Time, money and energy
3.People – Skills development
4.Relationships – Importance and dependency
5.Governance – measures to ensure adoption
An addition to the model could be ‘feedback loops’ (which could be part of governance): continuous feedback to show whether the people involved have the desired behaviors, mindset and dedication. These feedback loops can be created at different levels in the organization. There can be tactical/operational feedback on the level of the person who does the ‘real’ work. Another level can be strategic/process-oriented feedback on management level to track alignment with the core purpose of the cooperation and the desired behaviors of the operational team.
I believe that these 5 steps can greatly increase the chances of success in outsourcing and specifically in offshoring. In any initiative, the collaborating companies need to be clear about the destination (purpose/vision), be ready to dedicate sufficient time and money, get the right people in the right seats, invest in building relationships between the people involved and ensure that people show the desired behavior and create the desired outcome.
About Hugo Messer
Hugo Messer is a Dutch entrepreneur, distributed agile team specialist, and author. He is the founder and owner of Bridge Global, a software services provider, and ekipa.co., an agile coaching agency. He has been building and managing teams around the world for the past several years. His passion is to enable people that are spread across cultures, geography and time zones to cooperate. Whether it’s offshoring or nearshoring, he knows what it takes to make global cooperation work.
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Outsourcing here is reduce risk factor for businesses and help them to extend and flourish both their service offering and manpower at a time when the rise of operational costs could otherwise make this difficult. Now a days Social media like Twitter and face book are very effective to increase traffic. These will also help to outsource.