An outsourcing partner acts as a critical extension of your company in delivering the services and experience your customer's demand. When customers interact with your brand, oftentimes, customers are unaware that an outsourced partner is assisting them. From their perspective, the outsourced partner and your business are one and the same. Therefore, selecting and managing your outsourcing partner is vital to help your brand grow and deliver great customer experience.
To maximize the outsourcing services of your potential vendor, it is important to have a transparent and trust-filled partnership. After all, your call center outsourcing partner will also act as your brand ambassador.
Consider the following in choosing and managing your outsourcing vendor:
Choose the right vendor for your needs
The best vendors have a presence in the marketplace and provide high-quality service at a cost that works within your economic model. You need to select a vendor that will understand your brand and help you improve your company’s overall performance and ability to compete. There are a lot of vendors out there, but not all are good candidates for your business. Key attributes to look for in a vendor include:
- Demonstrated stability - You need to understand your vendors’ financial soundness and stability. Do they have a sustained presence in the market? Find out if they have a good business model and if their client roster includes companies similar to yours. Instability in your vendor can have a negative effect on your business.
- Expertise in your industry - Your business will benefit most from vendors that have experience in your industry and the expertise to support your unique needs. There are vendors that are known for their experience in certain industries. They are best suited for you as they are more likely to understand the intricacies of your business and market.
- Due diligence - Your vendor selection process should include reviewing a vendor’s place in the market. Determine if they are serving any of your competitors, and providing good results. Check out their media presence and their references. This can help determine whether the vendor is a viable choice and safe to work with. Key due diligence areas include their compliance with all legal requirements and whether they have any reported serious data privacy and security breaches.
Negotiate a contract that allows both parties to succeed
Your contract with your vendor should be a win-win for both organizations. You certainly want to sign a contract with your vendor that will deliver quality results and increase your company's profitability. A one-sided contract during negotiations can lead to trouble. You do not want to go through the process of working with a new vendor and then have to do it all over again because you pushed the contract too far. Outsourcing vendors will use their exit clause in a contract to terminate their contract with you if they see that the relationship will not allow them to make a fair return for their services. You can make an argument that a vendor should not have signed the contract if they didn’t feel they could deliver, but it does happen when dealing with outsourcers. Bring your procurement specialists into the process. Their expertise in negotiations and assessment of clearly defined objectives needs to go further than price. Focus negotiations on areas such as quality and service.
Proactively manage and build a relationship with your vendor
The most successful outsourcing relationships are based on an open and honest relationship with your vendor. Building that relationship takes effort from both sides. It requires flexibility and the ability to collaborate on a level that ensures defined success for both organizations. In any outsourcing relationship, business conditions may change, requiring joint solutions and maybe even changes to the contract. For the relationship to weather the storm and stay strong, transparent collaboration based on mutual solutions with a trusted vendor is needed. The vendor relationship is key to reaching a mutually beneficial solution.
Establish a vendor management plan
A vendor management plan should consist of a clear, comprehensive, and concrete set of conditions. This serves as a guide to the expectations that have to be met. This documented plan governs the operational relationship specifics and is an official company policy that needs to be understood by leadership and operations teams. The plan should be reviewed periodically and updated as necessary.
Monitor your vendor costs
Maintaining control over your business spending is necessary for attaining goals and managing your vendor. You should internally analyze your costs against your expected costs. As business conditions can change during the contract timeframe, it is imperative for you to understand the changes and re-forecast your expectations periodically.
Set KPIs to monitor vendor performance
The KPIs should measure the vendor’s performance and focus on the key aspects of the relationship (i.e., your company goals and what you need from the vendor to reach them). The KPIs should be reviewed from time to time as they are a key component of your operational excellence plan and processes. Here are some vendor management KPI best practices:
- Metrics - Define the metrics and Service Level Agreements (SLAs) that are critical to your company’s goals and support your brand in the marketplace. Make sure that your vendor understands how you define your individual metrics and agrees to the definitions. A mutual understanding of the metrics ensures you and your vendor are on the same page in determining expectations.
- Set realistic expectations - Your vendor is your partner and needs to be in sync with you on expectations. Setting contractual SLAs provides an agreed-upon measuring stick to assess meeting expectations.
- Continuous review - As business or economic conditions change, your KPIs may need to be revised. Set a regular cadence with your vendor to review their performance against contractual metrics and identify any SLAs that may need to be adjusted. Jointly reviewing with your vendor is important as adjustments may require contract revisions.
- Data tracking and reporting - Data reporting and understanding your numbers are critical to your success and your relationship with your vendor. You need a method for taking the raw data and putting it in a format that allows you to understand how your vendor is performing. Some businesses use spreadsheets, while the best practice is to use a software package (Power BI, Tableau, Looker, etc.). Regardless of your method of gathering analytics, it is a critical process in your vendor management toolkit.
Selecting and managing your outsourced partner needs to become a part of your company’s DNA. You can attain your desired results by putting the necessary processes in place. These best practices can guide you along your path to success and grow your business.
