Daily Archives: May 20, 2009

Practical Tips for Reasonable Service Levels when Outsourcing

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SourcingMag.com recently ran an article on getting the service levels you expect with outsourcing that resulted from a Gartner interview and contained some good tips that are worth repeating.

  • Define Realistic Expectations
    If you’re an efficient organization, don’t expect 30% savings from outsourcing. It’s going to take time for them to learn your business, and even when they do, the economy of scale they offer will only go so far.
  • Realign Expectations Annually
    Demands change. Markets change. You need to make sure your expectations change accordingly.
  • Define the right measurements and metrics.
    Make sure they measure against your goals.
  • Make sure you have a consensus opinion from senior management.
    This insures you define appropriate goals and relevant measures.
  • Prepare.
    Make sure everyone understands where service is going to be increased, decreased, and what they need to do to support the transition.
  • Outsourcing is not a solution.
    If you have a problem, you have to solve it before you can outsource it … otherwise, you’re outsourcing a failure waiting to happen.
  • Build in Flexibility.
    Long(er) term agreements need to be structured to anticipate the change that’s inevitable in business and technology.
  • Relationship Management, and Respect, is Critical.
    You can’t just hand the process off and expect a miracle.

Share Ideas Through a Center of Supply Chain Excellence and Put Your Own Best Practices to Work

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Knowledge drain is simply not acceptable in today’s economy. I couldn’t agree more. The ability to identify, analyze, and quickly adapt to market changes — before your competitors do — can mean the difference between a profitable quarter and Chapter 11. Undoubtedly! Companies fighting for survival need to deploy every asset they have, including a highly valuable but invisible asset — best practices developed by employees. Assuredly. But these best practices are typically not documented, and even when they are, not effectively distributed or consistently implemented. Unfortunately. This means that companies can lose their best ideas. Disaster waiting to happen.

Mergers and acquisitions, cost cutting, and senior employee retirements or resignations (because a bright competitor recognized their talent and offered them a significantly higher compensation package) all result in your hard-won knowledge, ideas, and insights walking out the door if you don’t have good knowledge management processes and systems that capture and share your best practices and knowledge.

That’s why I liked the recent article in the Supply Chain Management Review on how to put your own best practices to work, even though it did mention social networks when all you really need is the useful Web 2.0 tools they are built on (and not all the useless time-wasting add-ons found in the unproductive social networks of today). If you start with wikis and moderated discussion forums, you can build a useful knowledge network that will actually be used in an iterative and evolutionary way without a lot of hassle or up-front investment.

So where do you start? You can:

  • Design Across Internal Boundaries
    Make sure your forums and wikis are silo-free.
  • Recruit the Right People
    Recruiting Supply Chain Subject Matter Experts as content moderators is key to ensuring quality, validity, and program adoption.
  • Think About the Thought Process
    Manage information in a way that reflects a company’s culture and process patterns.
  • Design an Implementation Approach
    Tradeoffs between resource requirements, enterprise constraints, and implementation time are a few of the factors to consider. Make sure the initiative is owned by the business, and not IT. You don’t want the system that is technologically “the coolest”. You want the system that works for the people who need to use it.
  • Set Up for a Successful Launch
    Get buy in from a wide range of business users to use the center of excellence as part of their daily business routine.