The appropriate suppliers must also have the basic operational capabilities, pricing structure and geographic location that fit the needs of the contact type. An in-depth supplier evaluation process is always recommended, and this should involve functional experts from various internal departments (e.g. customer-facing departments, information technology, telecommunications, security, human resources, etc).
Establishing the Framework for Supplier Relationship Management
Selecting the best supplier will not guarantee great results without building the right framework for how the relationship will be managed. This starts with the development of shared criteria for success with the supplier, with a clear view of the relative importance of customer experience versus cost. These criteria need to be spelled out in both qualitative and quantitative terms. The contractual terms underpinning the relationship, including the pricing model and performance incentives, need to support those criteria. The challenge is to build the right structure that provides the right incentives and appropriate cost controls, yet is simple enough to be manageable.
It also is important to define the governance structure for the relationship. At both strategic and tactical levels, specific individuals on both sides of the relationship need to be designated with a clear definition of their scope of authority and responsibility. Special attention should be paid to defining escalation paths for resolving issues that may arise during the course of the relationship.
Both sides should appoint a single point-of-contact (SPOC) for the relationship, with a high level of cross-functional business maturity, an ability to earn trust on both sides of the relationship and the capability to navigate difficult issues in a manner where both partners' needs are resolved. These individuals, who should maintain an enterprise-wide view of all relationship activities on their respective sides and a global view for partnership success, are essential to enabling success over the long term.
Managing the Relationship as "One Global Team"
The best supplier partnerships are based on joint investment in the relationship, where both sides strive to make each other successful. Building "relationship equity" at all levels and across all functional areas is essential. A deep mutual understanding of each respective functional area and a willingness to adapt and align operating processes are hallmarks of success.
Building close relationships will enable alignment in strategic direction, with both sides developing a shared view of key strategic issues and the plans needed to continually improve overall performance. At the tactical level, this should be supplemented by relentless joint attention to day-to-day operating performance.
Achieving success requires an organizational approach that encourages collaboration between and across functional areas. Figure 2 depicts a "reverse bow-tie" structure for relationship management, with direct interaction between functional areas augmented by oversight from the SPOCs to ensure performance is on track to delivering the desired results for both partners.
The importance of having the right mindset, approach and structure to relationship management cannot be overestimated. The client must look at outsourced support as an extension of its own company, since it's perceived that way by customers, and provide the necessary management and operational oversight to ensure the supplier is successful. Abdication of this responsibility is a recipe for failure. Like a good marriage, long-term success comes from the mutual commitment to work through problems with an eye towards each other's needs and goals.
A highly successful customer support sourcing management strategy comes from understanding customer value and expectations for support, creating a support portfolio that delivers at the targeted intersection of customer experience and cost, selecting the appropriate internal and external suppliers to deliver that support, and then working together in a collaborative "win-win" relationship. The outcome will be support that delivers for all key stakeholders: customers, suppliers and ultimately shareholders. It's good business.