Managing the Outsourcer: Best practices for an emerging field
By Francoise Tourniaire

Would you like to be a pioneer? Look into outsourcing vendor management. With more companies outsourcing support, this position is emerging as a critical component of outsourcing success for you and for your customers. Most outsourcing managers are new to that kind of position, but you’ll find that a lot of the experience you’ve acquired managing support functions translates easily into outsourcing management. Adding the business side necessary to manage the relationship makes for an interesting mix. So where do you start if you’re thrust into the position of an outsourcing vendor manager?

Craft a strong contract

If there’s already a contract in place, you may have to live with it and its limitations. But if you can shape the contractual terms (or you have an opportunity to change them), include a clear Statement of Work and meaningful service level agreements (SLAs) to measure performance. Attach bonuses and penalties to the SLAs. In most cases, setting targets for:

• response time and abandon rate
• resolution times
• first contact resolution (FCR)
• escalation percentage
• customer satisfaction ratings

goes a long way towards ensuring a fruitful relationship.

Watch the metrics

Whether or not you attach financial consequences to the key metrics, review metrics religiously every day. A good metrics analyst who understands data warehouse concepts and SQL is worth his/her weight in gold. Analyze deviations and search for a root cause, starting with the top level metrics (response time, resolution time, FCR, escalations, customer ratings, as described earlier) and dig deeper when appropriate. For example, if more cases are being escalated, has there been recent turnover? Was there a lot of training scheduled, taking the reps away from case resolution? Is it a volume issue? Find out so you can apply the appropriate remedy.

Be in touch

Hold regular conference calls with the outsourcer. The provider may have a client manager available for you, but also insist that a direct supervisor or manager for your project attend the call. You want a single owner who takes full responsibility for fixing issues. At the start of the relationship, schedule daily calls. Migrate to weekly calls if you find there are not enough issues to sustain daily calls but always keep the option of holding a daily call if needed. During conference calls, you should:

• Review the metrics and analyze significant deviations
• Review problems with escalated cases such as inappropriate escalations, poorly-prepared escalations, and delayed handoffs. Brainstorm with the outsourcer on their root cause. Ask for a correction plan based on the root cause.
• Review upcoming changes in volume, programs, training, knowledge base, tools, etc.
• Update outstanding action items

Go for a field trip

Yes, it’s a big effort – and expense – to travel to a remote location, especially offshore but nothing replaces a face-to-face visit. Plan a visit at the start of the relationship and follow-ups every few months. While you’re there, perform simple tests such as dialing into your site from the remote location so you can have a first-hand impression of what the outsourcing staff has to deal with.

Make information flow

A critical function of the vendor manager is to make sure the outsourcer has the training and information it needs to meet the SLAs. Plan to provide on-the-job training and knowledge transition for several weeks at the outsourcer’s site. If you can, bring 5-10% of the outsourcer’s team to your site. It’s an expensive investment but one that will pay back many times over.

In many cases, you’ll work with a training specialist and a knowledge base specialist so your job is to oversee their work and make sure they deliver what’s needed. In smaller environments, expect to provide the training and documents yourself.

Look under the covers

Watching the metrics and holding regular status meetings are two important tasks, but they won’t tell you everything you need to know about how the relationship is working. As busy as you are, review a few random cases each day. It’s not quite as telling as strolling through the support center but it will give you a first-hand look at what’s going on.

Don’t hesitate to be a mystery shopper. Call the hotline or send an email and watch what happens. Is the result what you would want for your customers? Be really mysterious: Don’t call from your PBX or use your work email address.
Be curious, but don’t meddle. As long as the vendor is meeting your quality targets, let it manage its operations as it wishes. If the vendor isn’t meeting targets, make recommendations for improvement and help out as needed. If things don’t improve after a reasonable interval, take your business elsewhere. You are the client and you should receive the level of service you’re paying for.

About the Authors
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 “Best Practices for Outsourcing”, a practical guide to creating meaningful metrics for support organizations. For more information, visit www.ftworks.com or call 650 559 9826.

Narendra Dev, Director of Sales for Patni Computer Systems, a BPO and IT Services company, also contributed to this article. He has over 20 years of Sales and Operations experience. Narendra has taught classes and seminars at The Wharton School of Business and other colleges, on Managing Contact Centers, Outsourcing and BPO

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