After the Transition: Realizing the Benefits of Business Process Outsourcing Through Active Provider Governance

Written by David Borowski November 22, 2011

Senior Associate David Borowski discusses the importance of establishing effective provider governance and its role in achieving successful results in an outsourcing transaction. Sample excerpt: “Whew! Your provider has been selected, the contract is negotiated, and implementation is complete (with a few hiccups along the way). Now it's time to relax and reap the benefits of a hard-fought sourcing process, right? Unfortunately, many organizations fall into this mindset, thinking the heavy-lifting is behind them and passively watching while their business process outsourcing (BPO) relationship fails to deliver the intended and promised results. The key to creating, sustaining, and enhancing outsourcing value is establishing provider governance as a core component of your outsourcing strategy and tactics…But what defines effective governance? It cannot be limited to reacting to monthly metric reports, which often provide buyers with "green" dashboards yet fail to deliver a sense of satisfaction with the provider's level of service. The lessons from the sourcing and contracting processes need to be carried forward and put into practice once the relationship ‘goes live.’ While many consider governance and relationship management to be an investment and expect a return on that investment, it is in fact a table-stake, as failure to establish an effective governance model typically leads to suboptimal service and deteriorating outsourcing value. Strong provider governance relies on heavy doses of planning, effort, structure, and communication, all of which are easy to dismiss, but critical to realizing the benefits outsourcing provides.”

Business Finance