We’ve provided another week of valuable advice to vendor managers everywhere. Clearly, managing outsourcing vendors is a difficult task made more difficult when vendor managers don’t “get into the weeds” and ensure vendors are effectively managing daily activities and planning future activities accurately. So, our topics of the week addressed just these types of issues:
- Inventory Metrics - We discussed the importance of managing vendor quality, timeliness, and the often forgotten inventory and backlogs.
- Requirements Defects - How do effective outsourcing executives manage requirements accuracy and completeness?
- Forecasting - While most call center operations focus on forecasting accuracy, many backoffice outsourced operations completely ignore this fundamental component of vendor management.
- Scheduling - Often left to the outsourcing vendor, where it may or may not be done well, reviewing scheduling accuracy is a key component of monthly and daily vendor management responsibilities.
We definitely appreciate the feedback we’ve received and we’ll be sure to address your ideas in upcoming articles! Until then, please keep the ideas flowing and we’ll be sure to provide you perspectives on effective vendor management!
We’re not rookies here at 360° Vendor Management. We’ve seen a fair number of outsourcing contracts serving different types of operations. While the fine specialty advisory and law firms will write lengthy white papers explaining why service level agreements, termination clauses, change management, and governance organization (or lack thereof) are the root of all evil, the nuts and bolts of day-to-day vendor management is where most outsourcing relationships go sour.
We recently shared our perspective on the importance of forecasting. Failure to forecast or the inability to forecast accurately is definitely a reason why vendors fail to perform, but you, the highly skilled vendor manager, can control that. Ensuring your vendor schedules staff to meet your forecasts is an entirely different challenge because it’s a level of detail that most vendor managers completely ignore, but is a key ingredient in the forecasting-scheduling-staffing triangle of workforce management. Our experience with vendors and in-house operations teams suggests that scheduling is biggest challenge to meeting timeliness goals.
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One of the fundamental processes all outsourcing relationships must use is forecasting. Forecasts of volumes are essential to ensure the vendor has adequate information to manage staffing and scheduling.
Effective forecasts typically include expected volumes over 2-6 months - enough time to hire and train new resources. The forecasts should managed at a very granular level - call center operations should forecast in 30 minute intervals for each day in the forecast, while back office operations that handle daily batch processing systems should forecast volumes at daily intervals. Effective forecasts also look at historical trends. For example, your volumes might be lower on Fridays, except the last Friday of the month due to your billing cycles. However, the Friday after Thanksgiving, which is not the last Friday of the month this year (2007) could be either a thunderously busy day or simply a non-working holiday. Historical trends are very important.
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