My top tips for good outsourcing contracts – How do you avoid the pitfalls?

Mindpearl | May 20, 2014 7:50 am

My top tips for good outsourcing contracts – How do you avoid the pitfalls? By Karin Dale

Deciding to outsource your contact centre is a key strategic choice which will affect your organisation in the medium and long term. Many pitfalls can be avoided with the right outsourcing contract.

Whether you are putting a contract in place for the first time or renegotiating the terms of an existing contract, spending adequate time ensuring the contract is effective is a crucial step in creating a sustainable outsourcing partnership with your chosen provider.

Many businesses today find themselves in outsourcing agreements that are ineffective, because they leave too little time for contract negotiations and their objectives where not clearly defined from the onset. The result is either setting the outsourcer up for failure or unmet expectations.

My top tips for good outsourcing contracts:

  • Allow enough time to analyse and understand all factors that can affect the contract
  • Have clearly defined service objectives
  • Make sure your contract is a flexible document that delivers the benefits your organisation seeks – it should accommodate change and deliver value
  • Developing a detailed Scope of Work (SoW) is key in attaining success
  • This well-defined SoW also sets the stage for your legal team as they set out to finalise the contract
  • Ensure the description of services and related obligations are dealt with in enough detail
  • Make sure the contract properly reflects operational realities
  • Know and be realistic about your own organisations productivity levels before agreeing on the service levels your outsourcing partner is expected to maintain
  • Link the contract to measurable improvements in areas that matter the most
  • Validate the technical aspects of the contract
  • Include reporting obligations, governance arrangements, communication obligations and how you will work together
  • Consider the duration of the contract and the provision of price reviews in line with CPI variations.
  • Lastly, outsourcing contracts are only as strong as the negotiations surrounding them. Take a look at your procurement department before you task them with your outsourcing negotiations. Most procurement departments are so focused on cost; they overlook critical aspects of an outsourcing partnership. You are not buying hardware – an outsourcing partnership is relationship driven and service orientated.

I will leave you with one final thought to ponder on. Negotiations are not a battle to win. Successful negotiations rely on a willingness to execute viable alternatives. Remember, not everything is negotiable – decide on the priorities and negotiate to build a feasible solution in partnership.

Karin Dale holds an Export and International Trade Diploma from the University of Salzburg / Chamber of Commerce Salzburg – Austria. She moved to Australia in 1999 and joined Mindpearl in 2000 as Customer Sales & Service Representative in the Brisbane site. She progressed into the role of Training Co-ordinator assisting with numerous overseas training assignments, followed by 3.5 years in the role of Customer Sales and Service Manager. In 2008 Karin was promoted to General Manager Mindpearl Brisbane. She is Mindpearl’s Key Account Manager for the American Airlines account with a focus on overseeing the local and overseas contact centre service provision. Karin is a contact centre professional highly experienced in client relationship and project management for existing and new clients

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Author: | May 20, 2014 7:50 am