You’ve heard the stories about dashed outsourcing dreams: the training that went so badly it had to be done again, at great cost; the escalation rate that was five times as high as planned; the team that never quite got it, causing all kinds of customer complaints; and more. How do you avoid problems like this? By structuring the relationship properly to begin with, and by investing significant training resources upfront. Beyond that, here are the 6 steps to maintaining a successful outsourcing relationship.

Step 1: Appoint a relationship manager
Even the best outsourcers can’t read your mind or detect problems as quickly as you can. Having a single point of contact, a relationship manager, is the most important thing you can do to improve your odds for a successful relationship. The relationship manager ensures that everything runs smoothly; coordinates the various training, quality monitoring, and process projects, keeping everyone accountable.

The ideal relationship manager is:

• a business person who can focus on the business benefits and deliverables and not get waylaid by tactical minutiae or personal ties.
  
  
• a people person who can nurture personal relationships with people at all levels of the organizations (yours and the outsourcer’s). Even with an SLA and other contractual agreements, it’s the people who get the job done.
  
  
• well organized and able to juggle multiple issues, set priorities, and follow-up consistently. You want someone who thrives on multi-tasking.
  
  
• knowledgeable about your processes and requirements, since a central task of the relationship manager is to promote quality support.

Choosing the right candidate may require some tradeoffs. For example, an existing team manager will be very knowledgeable about your process but may lack the business experience, while an outside candidate would need to learn about how you do support. Balancing the people side with solid organization skills can also be difficult.

Managing an outsourcer is a full-time job if the volume is significant. Part-time attention is sufficient for smaller deals, especially once the relationship is working well. Have the relationship manager report high enough within the organization to be immersed in key decisions and changes.

Step 2: Measure results
There can be no successful outsourcing relationship without solid metrics. Ideally the metrics are defined and included in the outsourcing agreement, together with penalties and bonuses for poor or excellent performance. Here are typical candidates:

• Customer satisfaction ratings. I’m a great fan of transaction-based surveys (surveys that are sent automatically upon the completion of a case). These are especially handy with outsourcers. Be sure to watch the return rate to ensure the results you get are statistically valid.
  
  
• Response time and resolution time achievement. Most customer agreements include response time targets, which are then passed on to the outsourcer, but include resolution time targets as well.
  
  
• Some measure of productivity. Depending on the contractual arrangement, this could be average call time, iterations per case, or daily cases per rep. Don’t obsess on productivity measures unless they have a direct impact on the financial arrangement (if you’re paying per case, average call time is irrelevant as long as the satisfaction ratings are decent).
  
  
• Escalation ratios. Typically outsourcers may not escalate more than a certain percentage – often 10% - of cases back to you. Indulgence is appropriate at the start of the relationship and is often built into the contract.

Old-style outsourcing agreements often waive all metrics requirements when the case volume exceeds the forecast. While it makes sense to relax response time standards when volumes run high, don’t entirely drop other requirements such as customer satisfaction. Work out a reasonable give and take when volumes go through the roof.

Look at metrics daily. Small dips may be just bumps in the road, but it’s better to spot them before they become craters. Run detailed metrics to figure out why performance is not up to par. If you’re unhappy with customer satisfaction ratings, is the problem across the board? Or are a few reps dragging down the satisfaction ratings (and can they be coached or replaced)? Or are the best reps leaving (and why)?

Step 3: Spot-check quality
Even with customer satisfaction metrics and even if the outsourcer has a quality monitoring program, perform your own quality checks. There’s no alternative to find out what’s going on behind the scenes.

If you have robust quality measurement in place, such as a customer satisfaction survey, don’t worry about representative samples and a strict methodology as you would in a normal quality monitoring program. Instead, use the monitoring to find the real story behind the metrics as well as opportunities to improve both on the product side and customer handling. Work with the outsourcer on implementing changes.

If you’re dependent on the outsourcer to supply recordings, specifically request recordings of particular individuals on particular days to ensure that you are getting unbiased samples.

Step 4: Hold regular review meetings
Check in with the outsourcer at least each week – daily if there are issues or at the beginning of the relationship. Try scheduling a standing meeting each day that can be cancelled upon mutual agreement. This is a typical agenda.

• metrics review
  
• report unusual incidents
  
• announce new programs, products, process changes
  
• review progress on action items and projects underway

If you’re working with an offshore outsourcer, holding regular conference calls is even more important since time zone differences make it hard to have direct contacts during the workday. Insist on it. You should also schedule quarterly or bi-yearly trips to the outsourcer for face-to-face reviews and meetings.

Step 5: Celebrate the victories
It’s often said that outsourcing reps will never care about your customers as you care for them. Guess what: outsourcers typically feel that you care for them much less than you would for your own employees.

To address this issue, find ways to keep the reps motivated and feeling as though they’re part of the larger team. Send posters, sample merchandise, and other tangible materials so the reps can see what they’re supporting. Recognize high-performing reps with small prizes. Send congratulatory emails or small tokens when major milestones are reached.

Step 6: Know when to micro-manage
A very difficult issue with outsourcers is in knowing when to step in. Assuming you’re outsourcing to get out of day-to-day operations, you shouldn’t be in a situation where you have to manage the details, but there are some situations that warrant direct intervention.

• Fraud. While extremely rare, any illegal action on the part of the rep that would result in termination on your side should result in the rep being banned from your account permanently.
  
  
• Poor overall performance. If performance is poor overall and remains poor after a few weeks of corrective action, the outsourcer is probably in over its head. Use quality monitoring to pinpoint the problem and potential solutions. Dispatch an experienced trainer or operations specialist onsite and insist on applying your techniques to turn things around.
  
  
• Sustained individual weaknesses. Any rep can flub a case or anger a customer. But if it happens again after counseling or a rep simply cannot achieve minimum levels of productivity and customer satisfaction, ask that the rep be removed from your account.

About the author
Francoise Tourniaire is the founder and principal of FT Works, a consulting firm that helps technology companies create and grow their support operations. She is the author of “Successful Outsourcing”, a practical guide to negotiating, implementing, and managing outsourcing relationships. For more information, visit http://www.ftworks.com/success.html or call 650 559 9826.