5 ways to build and nurture a successful outsourcing relationship – a client’s perspective
We have been working with a number of Retirement Plan Providers over the last decade and a half. Without exception, all of them have been extremely happy with our services and have found us to be an important cog in the wheel of their growth strategy.
We have always asked our customers to view outsourcing as a strategic initiative, as opposed to a tactical, expense-saving measure only. By taking away repetitive back-end tasks, we free up our clients’ resources to focus on higher value customer-facing tasks. It also allows them to increase their stickiness with existing customers, and be more aggressive and competitive while bidding for new business opportunities.
I decided to get a customer perspective on what made such an outsourcing relationship succeed – while I had my own views, it was great to get them validated, as well as get a viewpoint from a different angle. I met with the Head of Operations of one of our largest clients, a Tier-1 insurance company – someone who started small with us but has grown our team by 12X in the last three years. If ever there was a vote of confidence on the value we brought to a client relationship, here it was!
Among other topics, we discussed the criteria for a successful outsourcing relationship. He suggested 5 tips to build a strong, long-term engagement:
- Don’t look at an outsourcing engagement as merely as an expense savings initiative.
- If possible, try and avoid the displacement of current domestic employees. Have a plan to upskill workers where work has been outsourced. This provides a growth path to onshore employees, and it also helps them see the value and opportunities the new skills may offer in their career. Build additional capacity and capabilities to take on new business.
- Transparency is key. Both parties should be willing to share feedback, including what’s working well, opportunities, and strategic plans.
- The offshore team is an extension of your onshore team. Keep the offshore team informed of changes that will impact them. If possible, include the offshore team or management in team meetings and “recognition” programs.
- Start slow and build the relationship over a period of time. Work on developing and implementing best practices, and then ramp up. This gives you an opportunity to pull back in the rare case you may need to, but more importantly, it helps you to make any necessary adjustments (both functionally and culturally) to ensure acceptance and success.