Collaborative Relationship Management in Outsourced Business Relations Copyright © WITH BVBA 2014 All Rights Reserved. European Outsourcing Association Prepared for: EOA Spain Version: v 2.0 Date: 21 February 2014 1 Dominique Kindt Chris Bell 1. 2. 3. 4. About With Relationship Management Literature Business context & Market challenges How we deliver Copyright © WITH BVBA 2014 All Rights Reserved. Content 2 About With Copyright © WITH BVBA 2014 All Rights Reserved. 1 3 • We are strong believers in the service economy, and the increasing reliance on each other to succeed. While outsourcing will continually increase, we think that good relationships are key rather than trying to find a better party over and over again. We want to be a niche company and help clients with relationship management • In 2013, our methodology, approach and technology platform have been recognized by IWT as an innovative service offering and awarded a grant. As such, we are very proud to carry the IWT label of “Innovative Company”. http://www.iwt.be IWT (Agentschap voor Innovatie door Wetenschap en Technologie) is the government agency for Innovation by Science and Technology. IWT supports companies and research centres in realizing their research and development (R&D) projects. They offer not only access to Flemish support but also funding programmes of the European Commission. Moreover, they stimulate every type of collaboration through Flemish and European innovation networks. Copyright © WITH BVBA 2014 All Rights Reserved. About us 4 Why we created Independent (Out)sourcing Consultants End-user (client) companies maturity increase Advisory Niche companies (TPI, EquaTerra, Alsbridge, Everest, PA, …) Big 4 Companies enter market (standardised) Copyright © WITH BVBA 2014 All Rights Reserved. 1. (Out)sourcing Advisory Services market is changing 5 2. The main issues and challenges with (out)sourcing are not in the initial phases of a “deal” Strategy & Selection (5 to 7 months) Honeymoon A good contract is not a guarantee for a good service delivery and relationship. Even without a contract, service delivery can be up to standards and satisfaction of all parties involved. Service delivery relationship (4 to 6 years) Copyright © WITH BVBA 2014 All Rights Reserved. Why we created 6 Procurement & Sales Management 1. Focus on transaction and categories 2. Unit price and cost saving driven 3. Continuous competitive atmosphere through RfPs, benchmarking and negotiations 4. Short-term individual gain oriented Collaborative Relationship Management Evolve 1. Focus on trust and value for money 2. Added value and optimisation driven 3. Growing collaborative atmosphere through structured feedback, open communication and performance mgt 4. Long-term mutual benefit oriented Copyright © WITH BVBA 2014 All Rights Reserved. Why we created 7 Relationship Management Outsourcing Advisory Copyright © WITH BVBA 2014 All Rights Reserved. Why we created 8 Relationship Management Literature Copyright © WITH BVBA 2014 All Rights Reserved. 2 9 • Collaborative Relationship Management is “tangible” and can be based on KPIs (not only a “soft” domain ) • 4 recognized standards related to Collaborative Relationship Management • The 18 C’s model for a successful long-term outsourcing arrangement (University of Portsmouth) • Building Relationships that Create Value: Collaboration and partnerships in the supply chain (Cranfield School of Management) • Vested Outsourcing - A Better Way to Structure Outsourcing Contracts (University of Tennessee) • Collaborative business relationships (BS 11000) Copyright © WITH BVBA 2014 All Rights Reserved. Relationship Management 10 Copyright © WITH BVBA 2014 All Rights Reserved. 18 C Model 11 Copyright © WITH BVBA 2014 All Rights Reserved. Building Relationships that Create Value 12 Copyright © WITH BVBA 2014 All Rights Reserved. A Better Way to Structure Outsourcing Contracts 13 Copyright © WITH BVBA 2014 All Rights Reserved. Collaborative business relationships 14 Added Value Why engage in Collaborative Relationship Management? Source: Research by the CIO Executive Board “Reducing defections in the relationship with 5% boosts profits 25% to 85%” Source: TPI “There is a potential of 35% to 55% value leakage in total if the relationships are not properly managed” (10% to 20% in duplicate efforts or wasted resources; 20% to 30% from problems not managed and performance not at expected levels; 5% to 10% in wrong vendor deployment and untapped opportunities)” Source: EquaTerra Source: Jill Griffin – Customer Loyalty “36% of respondents said the biggest team resolution for 2012 is improving crossfunctional collaboration. Nearly 28% of respondents said enhancing stakeholder relationships and alignment was the top initiative for 2012” Source: Iasta Insights poll “63% of companies believed they were losing an average of 25% of contract value due to poor governance or relationship management” Source: IAOP Market Conclusion: Post-award relationship management remains vital to prevent value leakage Copyright © WITH BVBA 2014 All Rights Reserved. “54% of organizations report challenges with managing IT vendors effectively” “61% of outsourcing buyers admitted to placing more emphasis on setting up their outsourcing contract than on managing it, making it a major factor for dissatisfaction” 15 Business context & Market challenges Copyright © WITH BVBA 2014 All Rights Reserved. 3 16 Context & Business Problem Active Business Relationship Copyright © WITH BVBA 2014 All Rights Reserved. Negotiation and Selection Phase • 4 to 6 month negotiation throughput-time • Active role for procurement, active role for vendor management (if present) • Support of external “deal maker” expert consultants to shape the contractual environment • 4 to 6 year service delivery period • Passive role for procurement, active role for vendor management (if present) • Focus on service delivery where initial expert consultants are no longer involved 17 • The current market offers a toolset that is “not-fit-for-purpose” to identify, chart and actively manage your business relationships • A sample of the current available market toolset with their specific “oversight” focus: Benchmarking projects with financial peercomparison focus Surveys to measure client or end-user satisfaction CRM platforms to store and analyse customer data Contract Management repositories for legal & compliance depts. SLA and KPI tools for operational tracking & measurement Process modelling software to structure governance Audits to highlight process deficiencies or to assess maturity Project management & financial dashboards Copyright © WITH BVBA 2014 All Rights Reserved. Market Challenges 18 Market Challenges Relationships Services Products & People Copyright © WITH BVBA 2014 All Rights Reserved. Evolution of Service Provider offerings & Client needs 19 • Collaborative Relationship Management will serve as an “influencer” to more effectively engage with the existing market toolset. It requires: • Understanding of the strategic intent of the organisation • In-house coordination • Coordination with the activities of the involved external organisations (i.e. mainly service providers) Benchmarking Satisfaction Surveys Dashboards Collaborative Relationship Management as influencer for: Audit Process Modelling CRM Copyright © WITH BVBA 2014 All Rights Reserved. Collaborative Relationship Management as Influencer Contract Repository KPI Measurement 20 How we deliver Copyright © WITH BVBA 2014 All Rights Reserved. 4 21 • We are a specialized “technology enabled advisory” company and help our clients with managing their internal and external business relationships: from the creation of a business relationship all the way up to the maintenance of existing relationship portfolios. Business Relationship Services Relationship Creation A collaborative approach for: • Providing strategy advisory • Assisting in relationship selection procedure • Due diligence & Negotiation support • Developing the Contract • Delivering Transition support Relationship Maintenance • • • Create deep insights in your relationship drivers & detect possible misalignments Ensure simplicity & consistency in relationship management Provide a collective memory over different business relationships Copyright © WITH BVBA 2014 All Rights Reserved. Business Relationship Services 22 1. Methodology for Collaborative Relationship Management based on University Research and Market Standards. Our methodology key aspects: • Intuitive data capturing and data reporting method • Focus on the key topics that matter in business (outsourcing, offshoring, shared services) relationships • SaaS software platform to support our complete Service Delivery lifecycle 2. A practical Service Delivery Approach to engage with the Client and Service provider in 4 phases: • • • • Intake: engage with both parties Collect: data collection through polling Improve: reporting and workshops Embed: guide towards successful improvement completion Copyright © WITH BVBA 2014 All Rights Reserved. How we deliver 23 with offers a structured service approach to help engage in Collaborative Relationship Management supported by intuitive data capturing tooling and executed through experienced professionals Structured Approach Standardised and repeatable Relationship Management approach based on University Research and Market Standards: • Data Reporting: Relationship Archetypes© • Data Capturing: Relationship Indicators© • Action based Relationship Management Improvement Plan with embedding support & SaaS platform Intuitive Tooling Experienced Professionals Bi-lateral and intuitive online poll platform assessing objective and subjective aspects of the relationship Seasoned advisors with full (out)sourcing lifecycle experiences We capture a view on your relationship portfolio from different angles: Risk, Governance, Delivery, Culture, Compliance, Pricing and Contract. Copyright © WITH BVBA 2014 All Rights Reserved. 1. Our Methodology Engaged in international (out)sourcing deals Thought Leaders in the market 24 1. Our Methodology c) Service & Client Provider “Twin” Relationship Indicators © • The 18 C’s model for a successful long-term outsourcing arrangement (University of Portsmouth) • Building Relationships that Create Value: Collaboration and partnerships in the supply chain (Cranfield School of Management) • Vested Outsourcing - A Better Way to Structure Outsourcing Contracts (University of Tennessee) • Collaborative business relationships (BS 11000) b) Reporting on Relationship Archetypes © d) SaaS software platform with back-end / front-end Copyright © WITH BVBA 2014 All Rights Reserved. a) University Research & Market Standards 25 • Identify business relationships • Tailor our service approach • Identify groups and poll participants • Select Relationship Indicators© & Templates • Activate on-line polling and evaluation platform • Collect “positions” per poll participant • Perform interviews and report on progress • Create activities and allocate owners & stakeholders • Owner manages activities on-line (progress / comments) • Structural follow-up of activity plan with sponsors • Create Relationship Management Improvement Plan • Relationship Archetype© mapping • Deliver report and perform interactive workshops Copyright © WITH BVBA 2014 All Rights Reserved. 2. Our Services Delivery Approach 26 What’s in it for you • Long-term partnership loyalty is beneficial to both the client & the provider (i.e. long-term investments in relationship management have a rewarding payback to both as a renewal with same provider is more cost efficient than re-letting in the market) • Attention for relationship management not only on strategic level but equally on tactical and operational level results in prioritizing on-thefield actionable improvement actions that connect with the teams Copyright © WITH BVBA 2014 All Rights Reserved. • Aligned teams will perform better and more efficient due to a limitation in needless escalations and miscommunications • Continuous improvement or Innovation proposals can be specifically designed to resolve a certain misalignment in the business relationship 27 www.with-services.com Copyright © WITH BVBA 2014 All Rights Reserved.
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