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SEPTEMBER 2006

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	The Perfect Storm QUOTE “Price is what you pay. Value is what you get.”  – Warren Buffett		Outsourcing and the Vendor/Client Relationship Last month, our newsletter examined a major player in the Perfect Storm —Globalization — and the trend toward outsourcing as a natural response.  We examined outsourcing from the client’s perspective - focusing on the potential benefits of outsourcing as well as how businesses can ensure that these benefits are achieved. In this newsletter we will examine what vendors can do to prepare for and manage an outsourcing relationship.  For a client/vendor relationship to be successful, all involved employees must adopt the mindset of “business partner.”  The five critical success factors for outsourcing vendors are:    1.    Understand your client’s business. 2.    Understand your client’s culture. 3.    Create mechanisms for communication. 4.    Build high performance teams. 5.    Deliver results and create ongoing value. Understanding Your Client’s Business:  Understanding the business needs and goals of your client is an integral part of building a successful outsourcing relationship.  This involves not only uncovering your clients' needs, wants, and concerns, but also understanding their overall business strategy, goals, operational processes, and systems.  Understand Your Client’s Culture:   The interactive and longer-term nature of outsourcing engagements may require you to work at client sites.  This may involve significant interaction with the client's employees. Remote work also requires interaction, which can be challenged by communication modes, time zone differences, and cultural preferences.  Understanding how your client does things, how decisions are made, and their motivations and values can help ensure the success of your outsourcing engagement. Build High Performance Teams:  The need to build high performance teams is critical in an outsourcing relationship.  Equipping your staff with consultative skill sets to augment their technical expertise is the key differentiator of a high performance team.  As a vendor, you may be required to support project teams with a mix of your staff and client staff.  The ability to build trust, collaborate, and develop a sense of team is essential in developing a winning outsourcing partnership.  Developing Clear Communication Mechanisms and Strategies:  It is important to establish open vendor-client communications early in an outsourcing initiative.  Developing a clear communication strategy will enable a smooth transition of work.  Mishandling communications can result in resentment on the part of the client's staff and unwillingness to cooperate fully with you, the vendor.   By providing tools and approaches to communicate effectively, you can ease the transition for everyone. Deliver Results and Create Ongoing Value:  Your ability to deliver results can either make or break your outsourcing relationships. Your client has come to you because they trust that you can deliver on your promises.  Creating a work agreement between you and your client is an excellent way to clarify what you will be doing, how you will be working together, and the results you are expected to produce.  It ensures understanding and commitment among all parties.  When it comes to creating ongoing value, you must continue to bring fresh ideas and perspective to your client, and demonstrate that you value their business, their people, and their success.  At Advance Consulting we’ve helped many organizations with their outsourcing endeavors.  Our products and services can assist you in developing the appropriate skills to make your outsourcing venture a success.  For more information on how we can assist you, please contact us at (831) 372-9444 or email us at advanceinfo@advanceconsulting.com.
			FIND OUT MORE Advance Consulting is a professional development company that provides state-of-the-art consulting services, workshops, seminars, and speaking engagements throughout the U.S. and internationally. Find out more at www.advanceconsulting.com, send us an email at advanceinfo@advanceconsulting.com, or call us at (831) 372-9444 for more information.