Call Center Outsourcing Tutorial Series Module 2   The do's and don't of call center outsourcing Creating a successful outsourcing relationship by Jerry Tschikof, co-founder and former CEO of Center Partners This tutorial discusses some key considerations for maintaining an effective outsourcing partnership - selection, expectations and performance evaluation. Content is drawn from Centerserve's eToolkit, Call Center Outsourcing.  The eToolkit provides the process, guidelines, worksheets and templates needed to make a successful and profitable outsourcing decision.  For more information or questions about the Outsourcing eToolkit, email: penguin@centerserve.com.   Introduction In an ideal world a contact center outsourcing relationship should see the provider as a seamless extension of the company's business model. The relationship represents a clear transformation of vision, mission, strategy and needs from one entity to the other. Service objectives are well defined satisfying the customer expectations while both parties receive mutual benefit from the relationship. Conversely, outsourcing relationships can be contentious, full of mis-understandings, unmet needs and ongoing conflict. No relationship will be perfect, but you can approach an ideal partnership if a few simple do's and don'ts are applied when selecting an outsourcing partner. This tutorial offers some ideas about important relationship elements while avoiding common outsourcing pitfalls.   Selecting the right partner Critical to outsourcing success is choosing the right partner. Paramount to making the right selection is the selection process itself. This process should focus on the business needs and be consistent with a preferred operating model. Too often these needs are driven by current tactical issues and miss the big picture, placing the relationship at risk from the outset. A broad perspective is imperative when determining needs and setting requirements for an outsourcing partner. The selection process must be managed so that vision, mission and business objectives of the entire organization are primary drivers. This practice results in organizational buy-in that fosters success between the partners. Some do's and don'ts that apply to the selection process are: DO'S Ensure your requirements and needs are representative of your business model Ensure that the selection process is thorough and complete Involve other organizational units in the process Use published tools to facilitate the process Target providers with experience Maximize face-to-face interaction by using formal presentations Seek advice from experts and check references Visit the candidate's sites to see how they conduct business Choose the best overall service and price offer DON'TS Focus on tactical issues Short cut the selection process in time and information gathering Limit organizational participation Create your own narrow process Scatter the RFP to non-qualified providers Limit face-to-face contact with potential providers Make a choice based on narrow internal judgments Avoid site visits Select a partner based on price alone   Emphasis on a sound selection process featuring the do's and avoiding the don'ts will land a relationship that can succeed.   Performance expectations Second to selecting the right partner in the success equation is a defined set of performance expectations. The document used to institutionalize performance is a comprehensive Service Level Agreement (SLA). A SLA can be viewed as the by-laws that govern a relationship. The SLA includes sections that cover service elements, organizational communications, employed technology, change or transition practices and problem resolution particular to the relationship. Arriving at a workable SLA is a negotiated process that considers needs, expectations and parameters for good execution. The selected outsource provider should be honest about capabilities and the company should be specific about service delivery requirements. Any argument that contends "I can deliver anything you need regardless of the complexity or ambiguity" is a winless scenario for both parties. The SLA should be constructed so that both sides have adequate information, eliminating the possibility of big surprises. Some do's and don'ts considerations for an SLA follow: DO'S Pay attention to details Clearly define service metrics Establish periods for measurement Define organizational responsibility Consider ranges of performance Allow for correction of minor misses Impose fair penalties for failure Allow for transition on termination DON'TS Be ambiguous about small things Assume metrics are universal Expect reporting will be automatic Let responsibility be vague Be rigid about performance Threaten the relationship with a miss Cause court action for failure Force immediate discontinuance   Always remember the SLA will be the guiding document throughout the relationship. The more time spent on developing solid governance material enhances the likelihood of relationship success. Always expect contention in a relationship so design the SLA as the vehicle for mutually resolving the contended issues. Remember, flexibility and good communications will always prevail over rigidity and silence.   Evaluating performance Outsourcing success is often contingent on evaluating results and working through problems. The best method for evaluating current status is to simply know how expectations are being met. This means the provider and company communicates organizationally on the right things and at the right levels. Adjustments can then be made to the operational details bringing customer service delivery back in line with the original intent. If the SLA was constructed properly, the foundation for making adjustments is present in the relationship. This means that organizational reporting and communications were defined so facts become the basis for discussion and problem resolution. Performance is often at the mercy of unforeseen business conditions and events not anticipated at the outset. Such happenings should always be considered in the performance evaluation. The measurement process reports performance against predefined metrics. Measured results are then interpreted as either success or failure. The findings then determine either a status quo position or a condition were actions must be taken to cure a problem. Regardless of results a good evaluation process must be employed to measure the soundness of a relationship. The do's and don'ts for effective performance evaluation are: DO'S Format the report content Specify the frequency of distribution Define organizational recipients Schedule frequent performance reviews Develop corrective action plans Impose non-performance sanctions Adjust for unforeseen circumstances Foster an open environment Make positives the preferred culture DON'TS Rely on others to read your mind Wait for reports to be delivered Be ambiguous about who gets what Wait for something bad to happen Expect the provider to automatically fix it Let a problem go unattended Be rigid in the face of change Ignore or stand off on issues Be passive about good performance   Frequent and quality evaluation of performance brings the parties together and confronts issues needing correction. Operational adjustments can be made without destroying the trust required in a relationship. Workable action plans solve problems without bringing the relationship to a crisis level. Both organizations know were they stand so surprises are eliminated. If continued non-compliance is present the notices for cure or termination can be employed with minimum of contention.   Flexibility Good relationships are founded on understanding and adaptation to change. The business landscape is very fluid driven by unanticipated changes in market conditions or the economy. It's inevitable that the landscape will change during a relationship sometimes forcing a re-evaluation of the original agreement. The ability to mutually modify or reconstruct the fundamentals will determine the strength and durability of a successful relationship. The willingness to anticipate and adapt to change really started in the selection process and carries through the performance measurement stage. Some maneuverability was provided in the SLA giving the parties elements of flexibility without dissolution. These elements should be discussed in performance reviews and actions should be taken to bring the relationship in line with current conditions. In the case of drastic change the parties may have to revert to renegotiations or termination with a planned transition. The objective for this scenario is to disengage with a minimum impact on the customers and organizations. Again, if well thought out the SLA should provide guidance for disengagement. The do's and don'ts for relationship flexibility follow: DO'S Recognize and accept change Offer training in change management Believe in the metrics data Openly discuss all issues Use SLA as foundation document Renegotiate if change is severe Disengage as a last resort Plan an orderly transition on severance DON'TS Ignore the current events Stay with the status quo Try to manipulate metrics data Be selective on issues Bypass the intent of original documents Opt out of the relationship Threaten termination Encourage immediate discontinuance   Solid outsourcing relationships are founded on a premise of trust and working through change. Thus it is imperative that parties be flexible enough to adapt to unavoidable movement in market and economic conditions. Finding workable solutions from fixing problems to orderly termination represents this flexibility. The selection process, constructing a beneficial SLA and open performance evaluations provide the foundation for flexibility and ultimate relationship success.   Conclusion Success in outsourcing is based on the application of good fundamentals. This success starts with a thorough selection process that chooses the best-qualified provider. Negotiating a solid Service Level Agreement that fairly governs the relationship fosters this success. A continual interaction between the parties using performance as the evaluation criteria builds trust and openness. Being flexible when change occurs and finding ways to adapt insures relationship longevity. Bringing two diverse organizations together to achieve common objectives is no easy task. But one can be assured that the difference between success and failure is the direct result of sustained effort, continued interaction and attention to fundamental details. For complete information on the process and templates (needs assessment, RFP, SLA) for building a successful partnership, see the Call Center Outsourcing eToolkit.