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How a GPO Can Avoid a BPO Horror Story

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Editor Coda
2015/08/27

Your company has just signed up with an outsourcer. Everyone is generally “up” for the change. But when operational leaders, like the shared services directors and the GPOs, start digging into the detail, they realize there’s a problem.

What these operational leaders notice is that (a) they clearly have a number of goals, and (b) historically, they have been solely responsible for achieving these goals. Now, however, these goals will be attained with the help of the outsourcer. This sounds positive, but then when you start peeling off a few layers, GPOs realize there are a few issues… like, the BPO does not:

  • Have a measureable set of KPIs that align with the client’s KPIs for particular projects.
  • Incentivize its people in the same way that the client does. With this variety in incentive plans, how can you be sure they will be focusing on the same goal?  For example, a GPO may have a bonus scheme, making up a good part of his salary, and the scheme is influenced by the quality of job the GPO does. This scheme was built to connect in with the wider objectives of the company. Is this GPO confident that the outsourcer’s GPO is equally incentivized? Does she have a plan that takes her in the same direction as the client GPO? How will the outsourcer’s GPO, who will work hand-in-glove with the client’s GPO, be rewarded?

…and that’s just two examples of how operational pairs within a BPO and a client company are often not aligned.

The problem typically stems from the fact that these operational leaders are not at the negotiating table when the deal is brokered, developed and signed off.

Their considerations should have been heard by a pair of ears sitting at that table, and factored in. But this takes tight organizational management, and doesn’t always happen.

It’s hard to agree on plans outside the wider contract once the ink is dry, so make sure, if you have an outsourcing agreement coming up, that you have involved the operational leads, (or if you are an operational lead – get involved), and have the numbers and schemes that drive operational action and goal delivery reflected into your thinking when you are negotiating the deal.

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