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Anna Engstromer shares an article on the management of external services, specifically, BPO transactions.

Consequences of poorly managed services are like chronic diseases: spreading its consequences little-at-a-time over vast areas – like customer service, availability, performance and speed of delivery – slowly building awareness for the problem but not considered as such until something breaks, or stops.

Temporal Focus

Much of any organization’s cost is external. How significant it is and how it breaks down by categories vary across sector and organization. Most organizations buy a significant volume of services through Business Process Outsourcing (BPO). The creation of such outsourcing usually gets proper resource allocation and management attention. The initial operating period typically gets it too, especially if much is at stake or if implementation success is part of managers objectives. 

But what about the continued management of external services? Typical BPO transactions have a life of several years. The process to source services is so complex it is a tempting option to extend services through renewal rather than to launch a new strategic sourcing process. Many BPO contracts go on being poorly managed, from the client side, for several years. Who notices this and raises the flag? Consequences of poorly managed services are like chronic diseases: spreading its consequences little-at-a-time over vast areas – like customer service, availability, performance and speed of delivery – slowly building awareness for the problem but not considered as such until something breaks, or stops. Since there is rarely one single cause for problems, the work to un-nestle third party contract management is hard. The people who do it are not always prepared for it, nor are they consistently understood and rewarded.

Key points in this article include:

• Elements of good contract management
• Vendor-led Conversation
• Contract fatigue

Read the full article, Why an A-Team to Do BPO Vendor Management, on Engstromer.com.