Vendor Managers Can Satisfy Internal Stakeholders

Before outsourcing, internal operations teams usually spend significant effort appeasing senior management by explaining every reason why deviations from performance were outside their control.

Marketing launched a new campaign. IT’s servers were slow. The telecommunication vendor’s T1 was hit by a backhoe. The competitor launched a misleading campaign. The weather shutdown deliveries in Chicago.

Well, have you noticed the change in tone after the call center or backoffice team was outsourced?

Customers don’t like foreign accents. The vendor cannot manage attrition. Prices are more expensive than they are [insert nearby city]. Quality is bad. The contract is the problem.

In a classic Dr. Jekyll/Mr. Hyde transformation, internal stakeholders apparently have no qualms with scorching the earth with “it’s the vendor’s fault” or “outsourcing was a bad idea” type comments. Frankly, its disingenuous and doesn’t contribute to the success that is so necessary for today’s competitive environment.

Believe it or not, vendor managers can satisfy internal stakeholders. They can create a productive, opportunity-seeking environment. Use best practices to paint accurate, compelling pictures of your vendor-managed operations.

Here’s how.

• Drive Vendor Performance – No other factor matters more than ensuring the vendor performs. Do everything possible to make the vendor successful – improve training, drive continuous improvement, take the time to thank vendor agents, and champion changes within your own company that remove obstacles and streamline the vendor operations.
• Quantitatively Measure Internal Stakeholder Satisfaction – Internal stakeholders are rarely quantitative – they are simply outstanding storytellers. How often have you heard, “A customer called me and complained about the vendor’s accents.” No operation is without flaws, however do not allow yourself to be fall prey to storytellers. Instead, actively create venues for stakeholder feedback using objective measures. On a quarterly basis or more frequently, ask your customer to rate their satisfaction. Track this. Trend this. Ask questions about the feedback. Use the feedback to improve the program. Never, ever sit on the feedback and allow the situation to fester and deteriorate.
• Promote, Sell, and Tell – Vendors do many, many great things. Take the opportunity on a semi-annual or quarterly basis to promote the vendors using newsletters that tell recent stories about performance highlights and overcome challenges. Never rest on your laurels! Although the business case may be 5 years old, create opportunities to sell the original business case again. Finally, tell people about your success and challenges in informal communications and meetings. Never, ever disparage your vendor, except when they clearly cannot perform. Even then, tell people about the opportunities other vendors could create if you replaced the incumbent.
• Baseline and Compare Results – Nothing creates momentum like comparing current costs and performance to historical baselines. Even if you forgot to baseline or if changes to the relationship/objectives are different, baseline the performance at that point in time and continue to track ongoing results.
• Conduct Internal Quarterly Reviews – Inundating internal stakeholders with newsletters, monthly results, and accomplishments in email is fine, but easy to miss. Meet with your stakeholders in a face-to-face meeting on a quarterly basis to review operations and achievements. Build great relationships and look for opportunities to realign objectives based on your stakeholders’ evolving environment. Invite your stakeholders to your quarterly vendor reviews.
• Be Opportunistic – If you have created success, there is always the opportunity to create more success by enlarging the pie. The best vendor management executives are entrepreneurial – always seeking for new challenges that their high performing stable of vendors can overcome.
• Never Hide Challenges – If performance wasn’t good, or the legendary backhoe really did interrupt service, communicate these challenges. More importantly, create a culture of root cause analysis and share those root causes with your stakeholders, along with the actions you’ve taken to improve future performance.

Do you do something different to create a positive relationship? Let us know!

Related posts:

1. In the Absence of Outsoucing Governance or Vendor Management
2. Another Tale from “When You Don’t Have Vendor Management Governance”
3. Poll: How did you learn to be an effective vendor manager?
4. Vendor Management: Quarterly Review Methodology
5. Good Vendor Managers: A Scarce Commodity