8 Tips for Nearshore Buyers: Are You Accidentally Screwing Up Your Outsourcing Deals?

Let’s face it, very few outsourcing relationships are perfect. (Then again, if you’re in one, we want to know your secret.)  The recession has put tremendous pressure on customers to act fast and sometimes irrationally, in their urgent need to shave costs and get the most out of their offshore deals. Providers will often argue that they want to give more to relationships, but they are constrained, often by budget, sky high expectations or an cloudy view into the needs of the customer, putting successful outcomes at risk.

Don’t always trust the number provided to you by the Chamber of Commerce

With that in mind, we have pulled together our Top Eight Tips for Q4, 2009 that are aimed at making your outsourcing or shared services relationships more durable, transparent and mutually satisfying. (A special plug to some of the outstanding speakers from the SSON event in Chicago in September who responsible for some of the tips; names are noted below.)

1. If MBAs matter to you, investigate how many MBAs are being graduated every year in your target country.  (Jay Desai, Vice President, Global Sourcing, Northern Trust)
2. The more transparency you provide to you provider, the more value you will receive in your nearshore relationship.  (Desai)
3. Don’t always trust the number provided to you by the Chamber of Commerce – in other words, go to more than one source for key economic data or indicators. (Desai)
4. Have the discipline to sit down with your supplier month after month to review evidence that outcomes are being met.  Maintain vigilance! (Gary Willis, Director HR Shared Services, ACCO Brands)
5. Trying to find an ITO partner with innovative ideas? Investigate their competence with Six Sigma and TQM. (Lee Coulter, SVP, Global Shared Services, Kraft Foods Inc.)
6. Both parties should be focused on mutually assured success, instead of mutually assured destruction. Take a look in the mirror and figure out which path you’re on. (Coulter).
7. Don’t be deluded into believing your providers when they say they can’t cut prices. (Tim Cummins President/CEO, IACCM).
8. Most contracts are incredibly inefficient. As much as five percent to seven percent of the overall project can be trimmed by using a sharper pencil to renegotiate the contact. (Cummins)