Much to our detriment, lack of governance is systemic in our industry, and both parties – outsourcing providers and the buyers of these outsourcing services – are equally guilty of not following best practices.  Too often, while in the buying and selling phase when we are busy establishing the initial relationship, both provider and customer bring in their most senior people and devote a large amount of time and money to governance when, in fact, we all know that the most difficult and important time to making good governance a reality is when we partner together to effectuate real change.
Historically, this is when the providers and client delegate work to those who are not as highly skilled or have the authority to make decisions. And while experience has taught us that governance cannot be delegated, many from executive leadership teams forget this time and time again, and as a result, we fall back into old habits.  I have seen this happen repeatedly.  People are difficult to change, processes remain as they are, decisions get delayed and the situation reverts to “business as usual” resulting in a situation where everyone loses – the intended goals and benefits are not achieved as sustained changed cannot be realized.
Looking ahead, industry trends point to little change and the continuation of business as usual as we approach another cycle of large, complicated deals.  If we want to truly make an effectual change with long-term benefits for both parties, now is the time we must avail ourselves of strong governance.  The relationship between provider and customer needs to go deeper than simple labor arbitrage or even process improvement.  Those who don’t start fundamentally shifting how they think and work will find themselves at a real competitive disadvantage — processes will remain suboptimal, inefficiencies will creep back in, and overall costs will start to escalate.  If history has taught us anything, it’s that a good governance structure should never be underestimated.  And with proper planning and collaboration, there is hope.
The first step to getting “there” is to start rethinking how we – outsourcing providers and service buyers  – work together in order to create a sustainable culture of collaboration and overcome the governance challenge.  This sounds easy enough to achieve, but in fact, can be a long, difficult road of culture change.  For example, planning and execution must be holistic and aligned for both parties  – is there a culture and chemistry fit, are the right people involved, is there executive commitment and oversight?  If either party answers “no” then the relationship and processes must be re-evaluated as both the provider and client must assess the larger need for change.
In my experience at Capgemini, we aren’t looking at just the numbers.  Rather, we evaluate the entire organization, from culture to business processes, and believe that both parties the client – and –us want to work with a strategic partner.  As strategic partners, together, we not only resolve conflicts and implement processes, but also, introduce a cultural shift so that cost and service expectations are met, processes are optimized, business performance is bolstered, and new sources of value are realized.
As many of us have experienced, outsourcing is a long journey, and when done properly, can bring double the benefit for everyone.  But in order to make it work and effectuate real change, let’s first collaborate properly so that we can overcome the governance challenge.