And Kops is back with… outsourcing clients’ merit badges

Is there no stopping the colossal Kops crusade to conquer the world?  Or at the very least, award merit badges to outsourcing clients?  She’s now threatening to show up at the HfS 50 next month with merit badge T-shirts… Oh what a wonderful life we all lead…

Deborah’s top 10 outsourcing client merit badges

In my last article I listed the merit badges that any outsourcing provider professional worth his salt must earn before they consider themselves a bona fide member of the fraternity. But the clients of the world doubly deserve their very own merit badges, earning their stripes not only by dealing with providers, but also herding the cats we call “internal customers.” And together, that’s no mean feat.

In this, the 100^th anniversary of the founding of the Girl Scouts, an organization that measures character growth and skills attainment by the number of badges on a sash, it’s only right and proper to award badges to those trusty folk who step into the unknown every day, putting their careers and their internal relationships on the line in a valiant effort to change corporate business models. Give kudos to those who perform a balancing act between relationships and service levels, cost and quality, the needs of the business with the goals of the enterprise, and even venture out to push for a little innovation from time to time.

Outsourcing clients of the world: examine your experience to see if you’ve earned Deborah’s top 10 client merit badges. And if you find some that I’ve missed, I’ll lean on my personal badge maker to design some more.

MIA BADGE You’ve been assured of executive sponsorship, nay pushed into outsourcing with the promise of sufficient CXO air cover to ensure that you don’t become the poster child for dystopia (in plain English, that’s a pretty dysfunctional organization). And when the outsourcing strategy is first mooted at the top of the house, you truly believe that you’ve got great support. But if your sponsor is “missing in action” when the going gets rough, you quickly realize you’re holding the bag when it comes to selling and managing the change.

Most C-suite guys prefer to leave a legacy of growth, not “I outsourced the place.” So whether your sponsor thinks he’s Moses (“comes down off the mountain to deliver the Ten Commandments, then beats a hasty retreat”), or has been watching too many Soprano reruns (“communicates like a drive-by shooting”), the net effect is that you’ve no choice but to go it alone.

Automatically win your badge if you can put together a coalition of like-minded business unit leaders who are convinced that outsourcing is the way forward despite the fact that your sponsor is nowhere to be found. Earn 10 points if you don’t need body armor when you go to sell to your internal customers. And next time, get it written in blood that you’ll have the full force of the C-suite behind you.

PIGGY IN THE MIDDLE BADGE Your provider is screaming unfair as you lay the number of exceptions and too much red on the dashboard at their feet.  And your customers, who have never really moved on from the good old days of internal delivery, blame the provider (and your team, by association) for every snafu, big and small, regardless of the fact that their invoice wasn’t paid because the cost wasn’t authorized by the business.

The blame game reaches a fever pitch as you try to locate the root cause of the noise. Is it the direct result of a provider that boasts of client-centricity, but it’s really his way or the highway? Is it a customer who refuses to drink the Kool-Aid of globalizing services? Is it due to fact that you made insufficient investment in change management? Or can you blame the problem on a corporate culture that lets every business line to do whatever they darn please?

If you can manage to survive the squeeze play between the two parties, and still maintain your sanity, give yourself five points toward the badge. If you can keep the invectives down to a stray expletive, award yourself another 10. If your personal performance review is still good, you win the badge. And if you can go out and play golf with either party on the weekend without any mention of outsourcing, you are a candidate for Secretary General of the United Nations.

“HELL, NO , I WON’T GO” BADGE All your internal customers are aligned…or so you think. You’ve just spent a year (and a lot of scratch) with a white shoe advisory firm to come up with a strategy you think is fairly foolproof. Solutioning with the business lines or geographies is starting to look like successful shuttle diplomacy. The CFO has debited corporate budgets to account for forecasted savings. You’ve negotiated with IT to put off the ERP upgrade until you stabilize outsourced operations. Providers salivating over the prospect of a 1000 man global deal have just completed a six month RFP process, giving you pricing that is a throwback to the days of penny candy.

You are just about ready to rock and roll with your chosen one at the negotiating table, and then the head of the largest geography in scope says he’s out of the deal—“pending further analysis,” until you run a successful pilot in an insignificant geography, or because he’s decided to set up his own shared services operations.

Suddenly the business case isn’t looking very pretty, and the rest of the customers in scope are threatening to jump ship. Your boss is complaining because you couldn’t keep your stakeholders in line.  But there’s a bright spot—your provider isn’t going anywhere; the sales lead calls you every day to see if they can “help.” Award yourself a badge if it’s only a momentary delay and your boss comes out of the woodwork to impose the deal. Give yourself two badges if the deal goes away and you find yourself a better job.

YOUR-CEO-PLAYS-GOLF-WITH-MY-CEO BADGE You are committed to running a fair and objective provider selection process. You’ve finally gotten your procurement team to understand that you’re not buying airfares or pencils, and that quality, relationship and value are just as important as price when it comes to choosing an outsourcing provider. Your customer panel has eagerly participated in the sourcing process so you’re optimistic that the provider you select will work effectively with the majority of stakeholders.  You’ve seen through the advisor’s bias toward a certain outsourcing firm, and are comfortable that you’re making the right choice. You’re about to pick up the phone to inform the preferred provider…

…when you get a call from your boss. Turns out that a global outsourcing player that screwed up in the proposal process is a major customer of your company, and that your respective CEOs have not only been playing golf together for years, but are also godfathers to each other’s first born. Player’s top man is now bending your CEO’s ear about the synergies he can deliver because of the companies’ IT partnerships, and promises of most favored nation pricing. The boss says he isn’t trying to bias the selection process, but wants to ensure that said global player has gotten a fair shake at the deal. So you spend the next week justifying your process in writing.

Immediately award yourself the badge if your selection documentation and evaluation criteria are so bullet-proof that you never hear from the boss again. Take five points if you have to give said player another chance by bolting on a best-and-final process, and your decision still stands. But if the global player ultimately ends up with the deal, refrain from telling the team you initially selected through your sourcing process that relationships are all that matter.

THAT’LL COST YOU BADGE You only thought that your contract was designed to flex to take into account your ever-changing business conditions—a few additional company codes here, a small process there, a pick up of three heads in the Ivory Coast, and even a change in application that will ultimately make your provider’s life much easier. During the pitch, the provider team assured you that they understood the vagaries of your business, and committed to be flexible.

But when the rubber meets the road, the provider’s “that’s out of scope” starts to sound like a broken record, and it becomes difficult to maintain the spirit of partnership upon which you started the relationship in the first place. Ten change requests quickly boomerang to over 200, a number that won’t decrease to single digits until the proverbial cows come home. One day each week is now dedicated to managing a change control process, choreographed like an elaborate game of gotcha with each side keeping copious score.

Look at the bright side—if charge requests were frequent flyer points, you could go to the moon and back. Give yourself one point toward your badge for every request over 50, and get double miles over 200.

BAIT-AND-SWITCH BADGE The provider’s leadership promises you that you’ll be a foundation client, and your business will earn you care and feeding from the CEO Himself as your executive sponsor. You’ve been assured that the A team is assigned to your gig, and that the sales guy that you like so much will continue to serve as relationship manager as long as you want him.

But after the contract’s signed, all bets are off. You haven’t seen or heard from the CEO since the day he begged for your business.  Or your provider is now angling for a bigger fish, and your client service team (which happens to be the only one with domain expertise) is now being reassigned. The supervisors assigned to your gig suddenly have a lot of life events that cause them to rotate off the job.

Give yourself the badge if you contractually obligated the provider to seek your permission before reassigning team members. Count yourself lucky if your client relationship manager is a real advocate for you. And next time the provider’s CEO drops into town for an impromptu meeting to sell you more scope, conveniently take the day off.

THIS MARRIAGE CAN’T BE SAVED BADGE  The relationship started life out as the sine qua non of all outsourcing relationships; it was “vested,” or “aligned,” or a “strategic partnership,” with governance meetings looking like holding hands and singing Kumbaya around the campfire. But after a few months of missed deadlines, cost overruns, transition team attrition, and recalcitrant stakeholders, the new relationship is an exercise in Olympic-class finger pointing. Where there were once brief agendas, there are now 80 page PowerPoint decks with a lot of red. Governance meetings are so crammed with experts from both sides that the conference room looks like a mosh pit. You need three hours to brief your boss before every come-to-Jesus session. And document, document, document is now the name of the game.

Tick off the boxes if you can still make small talk with your provider transition lead. Pat yourself on the back if you can still look your client partner in the eye. Give yourself extra credit if you can get through a meeting without throwing a hard copy of the contract against the wall. And immediately sew on the badge if a bit of marriage counseling (aka “outsourcing health check”) saves the day.

ACQUIRED PROVIDER BADGE Noise levels are low. Dashboards look like golf greens. You’re invited to your provider’s MVC (most valued client) retreats in exotic places. Life is good.

Then, even though your provider’s CEO has heretofore been able to successfully dispel every acquisition rumor headlined in The Times of India, the press release finally comes out. Said provider is now either part of a proverbial “merger of equals” (despite the fact that only one guy wrote a check), or the deal is a modern adaptation of the parable of Jonah and the Whale. And Jonah didn’t swallow the whale.

The soon-to-be-former CEO assures you that nothing will change… with his fingers crossed behind his back that you won’t walk and reduce the valuation. The buyer execs knock on your door, assuring you that you are a valued customer (because they intend to build a new vertical around your logo).

Give yourself a pat on the back if you remembered to put a breakup clause subject to acquisition in the contract. Count yourself lucky if the new buyer was a close second in your selection process, and you like them. Give thanks if the client relationship executive you can work with decides to stay. Pray that this is the only Acquired Provider Badge you’ll ever earn.

VOLT-FACE BADGE After months of sourcing strategy development, market studies, business case development, and provider selection, the man at the top decides that outsourcing is no longer in the cards. Suffice it to say that the rumor mill has already taken its toll on productivity; your top talent is walking out the door; and even the provider community thinks calling on you is a waste of time.

In the meantime, your internal customers are breathing an audible sigh of relief while feverishly planning to build out shared services centers as fast as possible before there’s another flip flop on the outsourcing policy.

Count yourself lucky if you’ve invested less than seven figures of your budget in advisory and legal fees. Award yourself the badge if the volt-face was only an April Fool joke.

BAIL ME OUT BADGE Your provider had an extreme case of logo frenzy. Having stretched so far to get your business—pushing a solution to the edge of the envelope, promising heretofore unheard of results, and buying the business at a ridiculous price point—the deal is a mess. Transition is six months behind schedule, service levels are being missed left and right, and the folks on the help desk don’t know the difference between Austria and Australia.  Your company’s role in falling for the hype aside, you are now experiencing everyone’s worst nightmare: an un-implementable solution, screaming customers, and a provider begging for mercy.

You call out whatever troops you have left to shadow delivery. Ten global managers hop expensive last-minute flights to India, The Philippines, Latin America or Eastern Europe. You’ve got a contract out on the lawyer who pushed the pricing to ridiculous levels during negotiations.  And you slowly reset expectations to more reasonable levels while you spend part of each day taking an internal bashing.

Thank your lucky stars if you get performance back on track in a few short months. Consider yourself also blessed with extraterrestrial powers if your provider is humble enough to agree that they are out of their league, and will work with you to make it right. Don a Superman cape with the badge prominently displayed if you’re still with the company at the end of the crisis.  And apply for a lucrative job as a turnaround expert.

How many of these badges have you earned?  If you’ve sewn five or more on your sash, you have achieved the rank of sourcing leaders whose ability to demonstrate consummate good sense and grace under pressure will certainly earn you a place in the pantheon of particularly perspicacious professionals. The job of CEO is a cakewalk compared to what you live with every day…

Deborah Kops is Research Fellow and General Disruption Artiste, HfS Research (click here for bio)

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