Nikhanj: If you were to look at an organizational chart, I work with five other reps that are the day-to-day contacts for our vendor. I’m trying to help manage and develop the best practices our reps will use to manage their relationships with the vendor. That includes the types of reports we need, the SLAs we need to implement, and more. Trying to define processes across the divisions is difficult because each has unique needs. My biggest challenge is how to get our processes to the next level.

I deal with the contractual items. For example, what kind of penalties we incorporate, what kind of SLAs we agree to, how often the contract is going to be reviewed, how are we going to split the training fees, and so on.

As I work with our internal reps, I find that SLAs are easy to implement but I find that the reps think in terms of serving clients. The difficulty is having them think as the client. They have to set two very different SLAs. When they set these SLAs with the vendor, they need to put tools in place to measure these commitments. So when we get our SLAs done, we need internal fields to store the data we want to measure, and the vendor needs the tools to automatically capture the data we want to measure.

SSPA: What are some of the issues you’ve run into in working with your offshore partner?

Nikhanj: One of the issues in dealing with Indian outsource partners is that they’re very specific in the way they deal with clients. Just the way they interact, it’s a very sensitive culture and the thing with timelines and things like that are not as important to them whereas for us, when you miss a timeline it’s unacceptable. So there are a lot of different issues in that and the obstacle I’m running into is trying to train internal stakeholders on how to deal with an outsourcer, what type of meetings to have, what kind of expectations to set, and so on.

In developing our strategy, instead of creating solutions, I find more underlying problems that I need to address before we can get to a position that we can actually manage efficiently. Having the industry constantly changing just adds to the issues we have to deal with.

SSPA: How did you resolve these issues?

Nikhanj: I’m encouraging onsite vs. offsite training which is why we want to split costs with training within the contract. We think that goes a long way. I’m also encouraging our internal reps to have weekly meetings with the outsourcer on top of the meetings I have on a different level.

Another really big obstacle is that I don’t have the same control of the people that are working on these services; I can’t match the skill set of the individual to the client need. I have to leave that to the vendor, and that’s a challenge. The vendor reps are indirectly the ones actually dealing with the customer or client in many cases and there’s such a distance that they don’t know the intricacies of the client, nor do they meet them face-to-face.

SSPA: What other costs did you discover that you hadn’t accounted for?

Nikhanj: We also discovered redundancy and infrastructure contingency costs in case their office goes down. They need high-speed for the backup and high-speed costs much more on an ongoing basis.

Training is a big cost of outsourcing and as we continue our relationship, we find that there’s a large training investment, and an issue with turnover in India specifically. We have to figure out how we’re going to protect ourselves from training fees and secure ourselves for the fees we spend. You also can’t expect a one-to-one ratio when you’re trying to figure out headcount. You should plan on having more people at the vendor than you would internally.

SSPA: What metrics are you tracking or are most interested in tracking?

Nikhanj: You need to figure out how you’re going to measure what each of the reps does. Instead of managing on a daily basis, I’m trying to complete the analysis on a monthly basis. I don’t care what they do on a daily basis, as long as at the end of the month, they’re hitting the volumes set out in the SLAs.

So with two divisions that are outsourced, the metrics are specifically volume-based. With other divisions, we’re more concerned with turn-around time and the service agreement. It varies by circumstance.

SSPA: What technologies or tools are important in setting up and managing the relationship?

Nikhanj: One that really helps is a repository for all of your vendor’s information and client information, and you need to implement a process to assign ownership of who maintains these documents. You should set up these repositories by division. I’m definitely an advocate of knowledge bases.

Going back to ownership, when you’re assigning SLAs and contracts, you need to define the ownership. Remember, you have three parties involved now. There’s the client, there’s your internal team, and there’s the vendor.

One issue that also applies to metrics is when a mistake is created, there has to be a root cause analysis document completed which accounts for who made the mistake, what the mistake was, what the resolution is, and the ownership and the credit or penalties if any. There also has to be a QA process for the vendor that they need to complete and follow. We had to put a process in place to measure that the QA had been completed.

SSPA: On the other side, if your vendor over performs, do you recognize that and offer bonuses or some other compensation?

Nikhanj: That’s a great point. We’re just renegotiating and we’re going to add recognition, so if they go above and beyond the SLAs, they’ll be rewarded.

SSPA: What would you do differently if you could start over?

Nikhanj: I would develop a more detailed contract with the vendor, including ways to measure performance. A lot of people would disagree with that because, when the relationship is new, they believe the contract has to be flexible. I think you have to be detailed and review it every quarter to stay on top of it.

Also, I’d make sure I knew the internal stakeholders and train them on how to deal with the vendor. There has to be a level of consistency. You also have to address any gaps with the internal team regarding their experience with vendors.

And I’d document everything.

SSPA: Any final or concluding thoughts?

Nikhanj: There were some personal issues in terms of experience and knowledge of outsourcing. For example, I’ve always managed a team and the contracts, now I’m in a position where I need to influence others to get the work done, which is quite a change. But we’re all working through it and having success.