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ISG White Paper

Keys to Ensuring Provider Collaboration

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by Lois Coatney

Multi-sourced operating environments allow organizations to leverage best-of-breed capabilities and match highly specialized service providers to specific business requirements. Though the potential benefits are significant, they can be even greater if you can establish a tone of collaboration in each phase of sourcing. The challenge is to facilitate accountability and eliminate finger-pointing in a diverse team of retained and outsourced providers with a wide range of capabilities, skill sets, agendas and areas of responsibility.

Consider these Top 5 ways to ensure effective provider collaboration:

  1. Emphasize collaboration early and often. During service provider selection and contract negotiation, discuss in detail the activities and mechanisms that you will use during transition and in operations to integrate services between providers. By setting expectations early, you can help providers address collaboration in their best and final offers. ISG observes that the ability to collaborate is emerging as a competitive differentiator in service provider selection.
  2. Write it down. Incorporate specific obligations in each provider’s contract, including participation in the creation of, agreement to, and adherence of Operating Level Agreements (OLAs); active participation in cross-provider governance forums; and – within each process area – documentation of each provider’s responsibility for interactions with retained and other external providers. Use performance metrics to measure and document individual and collective success. Contractual language and shared service levels should span end-to-end transactions so that all involved service providers share in the responsibility and also share an incentive to make sure business end-to-end services don’t fail.
  3. Plan, plan and plan. Evolving a client environment through transition and transformation with just one outsourcer is a challenging proposition; if multiple service providers are involved, the challenge is exponential. Ensure integration of planning, design, testing and implementation by coordinating changes introduced within an environment across all providers. Align and track plans by inter-dependencies, and address any delays or issues in an integrated fashion.
  4. Get granular. Use cross-provider process integration workshops to detail operational interactions and define OLAs. By breaking down activities at a granular level of detail, providers can reach collective agreement on how each shared process will work and how the various providers will engage with each other, clarifying their accountability within each process. Use business scenarios to walk through operational processes and assess the method, data content and timescales for each cross-provider interaction. Then use the outputs of these workshops as the OLAs, signed and agreed by all providers.
  5. Institute groupthink. Ongoing cross-provider governance forums are essential to manage performance, issues and decisions on an ongoing basis. Define these forums during the sourcing process and deploy them immediately at contract commencement to facilitate cross-provider communication and accountability. Reporting and addressing operational performance as a collective exercise fosters a culture of positive peer pressure, where no provider wants to be identified as the laggard on the team, and where finger-pointing and excuses are unacceptable. Collective analysis and reflection of performance enables continuous improvement.

For more information on this topic, download the author’s white paper, Play Nice: Facilitating Collaboration in a Multi-Sourced Environment or contact me to discuss further.