Suppliers are readily depicted as greedy, seeking to increase their revenue at every turn. Customers are cast as insatiable, constantly demanding more for less, both sides preoccupied with the hunt for contract loopholes.
These stereotypes of course represent wild exaggerations. But anyone with experience of more than a handful of cases will tell you that they often arise on both sides of the culture gap between outsource suppliers and their clients. They are by no means odd regrettable exceptions.
The service level agreements (SLAs) in the contract set enforceable benchmark levels for the quality of performance to be delivered. But herein lies the problem. Nearly all SLAs are technical in scope. They specify levels of system availability, response times and the like. Of course these technical standards must be met. Pandemonium breaks out if they’re not. But they don’t in themselves deliver any business benefit. They are necessary but not sufficient.
Time and again we encounter a situation where SLA targets are being regularly met or bettered, yet the client still feels something isn’t right… It’s actually an infuriating communication gap.
It is also an empirical truth that the discontent with an outsource arrangement varies with the distance of the beholder. The further you are from the deal, the worse it looks. Up close, the CIO team sees all the difficulties clearly.
They make allowance for people doing their best in an imperfect world. But the outsource agreement tends to look worst to the board. They feel alienated and indifferent when the conversation turns to the technical matters covered by the SLAs. They feel most intensely about the cost of the service: about the business and cultural issues that divide them from the supplier: and about the lack of any clear diagnostic of value.
What is the answer? What’s needed is an assessment of the degree of customer engagement (CE) achieved by the outsource supplier. Businesses today are no longer built on clever marketing messages directed at credulous consumers. Today the client is king.
Thanks to the spread of mobile telephones and social networks, the world has become one giant gossiping village. Businesses no longer dictate to their customers, they have to engage with them. The quality of CE is measured by the proportion of the customers who are also advocates.
It is necessary to measure the CE level attained by an outsource supplier in respect of a given client. The results of such an assessment provide a basis for future improvement, and an answer to boardroom critics who ask ‘how do we know what we’re getting?’
Finally, the assessment protocol needs to conform to the following requirements:-
- All the assessment data must be collected online, with minimal interruption of normal trade. It must take outsource service users only a few minutes to complete the assessment.
- The analysis must reveal what motivates satisfied and dissatisfied users of the outsource service and what’s needed to turn neutrals positive.
- The supplier and the user must be able to drill down into the aggregate data to target functions, business units, regions, product groups. Segmentation is the key.
- The assessment must always lead to ‘action this day’ items for immediate improvement.
- The assessment results must be business driven to match the board’s concerns.