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Establishing a Good Governance Process

by: Admin

Thursday, November 26, 2009 |

Improve Outsourcing Relationship

Although outsourcing is widely considered a cost-cutting measure, it is the ability of an outsourcing provider to work within the interests of their clients - and not just their own - that separates moderately successful partnerships from highly successful ones. It is for this reason that there is an increasing need for outsourcing to involve a framework within which the outsourcing partner must perform. This is what is called the “governance framework” and it is this that determines whether or not many outsourcing relationships succeed or fail.

Given the main goal of a governance process as one that ensures value-adding services and the preservation of the end-user experience, the governance structure should be built on the principles and guidelines behind the rules – and not  just the rules themselves. The following are a few tactical aspects of good governance espoused by ERP management outsourcing firm, OneNeck:

Service Level Agreements (SLAs) – as this is the foundation of your services package, it should clearly define process, service levels, checks and balances, and the reporting mechanism for your outsourcing agreement.

Quality of Service reporting (QoS) – ideally you will be able to define your own metrics for QoS allowing you to establish the standards of which your agreement will be measured against. This will also involve time frames, the reporting process, and problem resolution structures.

Face-to-face meetings – as rapid as developments have been for online communication, it will never really be able to substitute frequent meetings in person. Paying a visit to the outsourcing partners offices and assessing the quality of the workplace and infrastructure can go a long way for fostering the trust and transparency that successful outsourcing relationships demand.

Flexibility – unforeseen changes and difficulties are often the downfall of outsourcing partnerships. The outsourcing vendor must therefore be flexible enough to keep up with the changing needs of customers, especially with regard to expansion of services. Flexibility is the main factor involved in the longevity of an outsourcing relationship. 

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