Introduction

OK, so you’ve decided to outsource critical processes to an external provider. Chances are, the sourcing effort is not new to you or your firm. Likely, your staff has spent countless hours defining the scope of work and external performance expectations. But if you are like many clients – to speak plainly - when you neglect to plan, fund, and implement internal staff development in concert with outsourcing, you will dilute the positive effect of the deal.

Why Outsourcing Relationships Need Internal Staff Development

Your firm’s department most effected by an outsourcing transaction is that portion which is left behind– the retained

This development need is somewhat unique compared to other third party service contracts. The nature of the outsourced relationship tends to be more complex as multiple, integrated responsibilities are weaved within a scope of work; tasking various company departments and perhaps other third parties. Acceptable performance typically results from interdependent activities that at times overlap. Risk ownership may be difficult to discern when results are not acceptable. Further, healthy outsourcing relationships usually have a sense of mutual responsibility, respect, and a need for heightened and clarified communication. Making this all work requires an upgrade to internal skill sets.

Usually, internal staff members have achieved past success through the application of technical skills, knowledge of the culture, resource control and good-old-left-brain problem solving. However, the outsourcing transaction forces internal focus to shift from methods-of-delivery to specification-and-measurement-of-results. It is with much discomfort that internal staff finds themselves outside the delivery process; and in need of complementary skills required for working with an external partner.

Four Required Skills for Retained Organizations

Your staff training requirement will not simply take care of itself over time. You must lead with appropriate planning, assessment, and funding. The outsourcing deal, and your value-add activity will be optimal when your retained organization has developed these critical skills:

Improve competency in strategic skills such as policy development, regulatory guidance, technology and architectural standards, business problem solving, dispute resolution, and performance management. Learn to be more proficient at higher level skills that assure business value from process delivery.

Develop fair and consistent criteria for judging provider's results while letting go of service delivery methods and staffing issues. Learn to manage priorities; and use service level agreement mechanisms and governance processes to guide provider behavior.

Enhance those soft skills that make or break a relationship. These would include: written and verbal communication, empathy, compromise, and respect for others. Learn to work through others that do not necessarily share in your culture.

Create client transparency by sharing insight on company’s competitive environment, including issues with customers, suppliers, and fulfillment. Learn how to link today’s business issues to specific requirements for provider's service, products, and performance expectations.

Outsourcing relationships are different from other types of third party service contracts. Your retained organization needs to let go of out-tasked responsibilities and develop complementary skills that create business value.