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When Outsourcing Partnerships Turn Sour

by: Sarah Joson

Thursday, August 23, 2012 | Outsourcing News |

Signs of a Crumbling Outsourcing Partnership

There are several reasons outsourcing relationships crumble and solutions for each case vary. Some of the factors heavily depend on the location of the outsourcing provider and scope of the partnership.

Amidst all the obvious factors, industry experts can attest that the real reason behind a dwindling outsourcing partnership could be caused by mismanagement of the entire operation where both parties act as instigators.  

In an article posted at Info.ISG-one.com, the common signs of unstable outsourcing partnerships were identified in hopes of helping business owners recognize the stance of their operation and restore whatever is worth saving because after all, executives initially sought outsourcing services to improve the company and not to acquire additional problems and costs.

Where green actually means red. Some service providers are puzzled when all of the signs point to a good and smooth operation, yet the client is breathing down their necks. What they are missing out on is even if they are coming up with good figures, the client might not be happy with something else, which then fuels a misunderstanding between parties. Like a “watermelon”, things are green and dandy on the outside but red and unstable on the inside.

Providers must keep in mind that they should also align their efforts with what the clients want and how they want it to be done. This should also resound to the employees - they should follow whatever is written in service level agreements.

Contracts are not updated. Partnerships that refer to the contract often could mean they have trust issues. A good and ISG-approved exercise is for partners to periodically update their contracts to change the ineffective clauses and tweak the ones that could be more beneficial to both parties.

Old issues keep showing up. Like in any relationship, previous arguments that were not properly handled or solved will most likely come up during current confrontations. Providers and clients should meet halfway so that past issues wouldn’t interfere with current problems and they could finally move on instead of gaining more challenges - or worse, they may start avoiding each other.
Communication gaps. Most industries, especially the ones that deal with technology, are constantly evolving. One reason businesses fail to keep up with the changes is poor communication within the operation itself. There may be instances wherein top management wants to get something done but job orders are lost in translation from the managers to the service providers. The more open the communication is, the better each employee could understand the importance of a task.

Failing to keep up with the new movements in the industry. Another concern of clients is that providers are not up-to-date with the latest technology or trends of the industry. For the providers, they also see that clients aren’t inclined on learning new ways to encourage their partners to create new things and processes that could be beneficial to the entire operation. Clients also need to show their support when dealing with new projects and innovations because these could make or break the workflow of the operation.

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