Understand the complexities of constructing and managing global outsourcing contracts

outsourcing contract managementA global outsourcing contract has to operate at a number of different levels and it is important that this is allowed for in the structure of the contract. Some elements of the agreement are fundamental to the strategic intent and so must remain in place unless renegotiated at a senior level. Many of the other requirements will be open to regular review and revision as the business needs and environment changes.

Think Global Growth appreciate that successful outsourcing requires a much greater sharing of confidential information. It also introduces complexity about obligations and liabilities that must be satisfactorily addressed and resolved.

The outsourcing contract should be reflected in the commercial management of the outsourced process. Thus specific roles, authorities and responsibilities need clear definition. However too rigid an outsourcing contract structure will limit the flexibility to manage in short term crises and longer term change. Effective operational communication, shared planning and reporting is essential and so outsourcing contract and operational management must be closely aligned. We encourage and facilitate a cross silo business management approach to deliver the best supplier commercial management

It is essential that the supplier is recognised and rewarded for delivering value to your organisation. Supplier incentives within the contract should therefore, whenever possible, reflect their contribution to the wider business and not just on meeting numerical targets. Although outsourcing costs are important, successful global outsourcing requires much greater alignment. A competitive tender process can undermine this contribution to overall value. Think Global Growth assists in the development of creative procurement and reward structures to secure the optimum balance of supplier cost and service.

How we can help

Think Global Growth have a unique combination of commercial, operational and softer skills acquired from years of practical experience. This enables us to understand the complexities of constructing and managing global outsourcing contracts. Business process outsourcing is an intimate strategy. It is therefore essential to both protect your business interests through the contract and to establish close and effective supplier management processes. When all is well the contract is rarely referred to but when conflicts arise the first act is often to check what the contract says. The right balance of contract and commercial management will prevent this. Our expertise can ensure that you achieve both, not in isolation, but in a more effective and integrated management structure.

We will support and advise you to ensure a well contracted outsourcing agreement that sets clear standards for performance and protects your interests while having the flexibility to allow short interval operational control to cope with unforeseen events and continuous improvement. We enhance this by helping put in place effective operational management control and reporting processes. Overall this substantially improves effectiveness and sustainability of any outsourcing implementation.

For more information about outsourcing contract management, contact us