Tim WilsonA responsible outsourcing provider is expected to respond to a buyer’s query with a clear and open assessment of the status of a contract, as well as the risks involved in an expanded engagement. They are also expected to push back if they feel they know how to do things better. But difficult news can be tough to deliver, and not every provider has the same approach. Below are six key steps to pushing back with clients – with specific pointers on
1: Don’t Push Back out of Deference
Providers can create headaches when they defer too much to the client, and even risk losing credibility. No one wants a provider to waste the client’s time. “I know of one story with a major provider in which they were far too open, asking the client how to classify and escalate tickets,” says Andy Woyzbun, Executive Advisor at Info-Tech Research Group. “When you are entering into a relationship, you expect expertise, and you want the provider to push back with standard operating procedures, documentation, and optimized service metrics. This is what they are being paid for – not just labor, but best practices.”
2: Metrics Make the Push Back
A provider can use standardized metrics to benchmark performance and push back when key indicators are failing. In fact, when the data add up, a client will expect a provider to respond. “Larger engagements will require more metrics, and that is part of the challenge,” says Leo Palacios, a delivery manager with Dextra Technologies, which is headquartered in Monterrey, Mexico. “You need to improve SLAs to help them out and give them the ability to measure things.” This is where standardization can deliver immense value – and make push-back relatively straightforward. It is also where a large provider can help. “If you look at a large company like TCS, there is benefit in aligning with what works for them,” says Woyzbun. “In this context, push-back is less political, because the provider can use metrics taken across their entire client base, and let you know if you are underperforming.”
3: A Single Point of Push Back
Whether it is a resource or technology issue, push-back is best handled in a proven fashion by key members of the provider’s team, with the delivery manager having the central role. “You need to have a delivery manager on the account who owns the process,” says Palacios. “On a large project, there might be more than one manager, but they have to be confident they understand the issue and are communicating clearly.” This is most necessary in agile application environments, where the provider is involved in the client’s full development process, ensuring requirements from testing to delivery. In this context, the reality is more one of collaboration than pushback, with fixed resource allocation a necessity to allow for ongoing cost assessments on both sides. “Governance is key, at all levels, and a clear roadmap,” says Steve Rudderham, an outsourcing professional who formerly headed the Global Transitions and Delivery Excellence teams for Capgemini. “Otherwise, any grey areas will be exploited on time and cost.”
4: Push Back the Value of Improved Resource Allocation
When the value is self-evident, and the explanation brief, push-back is a must, and that is often easiest to explain in the context of resource allocation. If the decision results in the more efficient use of labor, then the conversation can be brief and easy, with little resistance expected on the client side. Here, the standardization argument again comes in to play. “A simple example might be an outsourced help desk,” says Woyzbun. “Providers want the flexibility to have individuals who are not necessarily allocated full-time to one client, and they can only do that if operating features and log-in functions are standardized.”
When the push-back argues for a process change (i.e. standardization) that is tied to clear savings (i.e. improved resource allocation), the conversation is usually a painless one. By comparison, Woyzbun says that push-back that increases complexity is a tougher sell. “Clients want some configurability, but if you are pushing back too hard by deviating from standardized systems, you might be asking for trouble.”
5: Push early, or Pay Later
Given the importance of governance issues throughout an engagement, it is crucial that the early phases of a ramp up test the ability of the client and provider to collaborate. “The client is expecting some sort of reengineering of their processes, and early-phase push back can be crucial for assessing things like invoice processing estimates,” says Rudderham. “It is at this point that SLAs can be adjusted for issues like quantity and process flow.” This then protects both parties from risks later in the engagement, where a provider might suggest something only to find that the client responds with a ‘my way or the highway’ attitude.
6: Acceptable Push-Back May Require Risk Sharing
Clients are often trusted to push back on processes, but less so on technology issues, particularly in the context of application environments. “On the software side, companies will sometimes have a corporate mandate for SAP or Oracle” says Rudderham. “The push-back then comes less on the choice of application, and more on how to build processes to apply the technology.” In effect, if what is on offer is better, faster, cheaper, then there is no bad time for a provider to push back. But if more work is required to realize future efficiencies, then a client may want to get some skin in the game and suggest risk sharing. By absorbing upfront costs, and then sharing in future savings, a provider can have more flexibility when it comes to pushing back on how technologies and resources are deployed.
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