If you were to look at the sessions on Outsourcing and Offshoring conferences and advisories from Outsourcing Consultants, you would begin to think that if you had JUST the right CONTRACT, all of your troubles will be over, the hair will grow back on your head, all your wrinkles will vanish and you will be forever younger!
Contracts and Competing on Price! There is no surer way making sure your customers are at their unhappiest than focusing on these two factors only in Outsourcing or Offshoring!
You may be able to fully enforce your contract, extract the necessary pounds of flesh from the vendor for all and sundry transgressions, but you have lost valuable time, effort and opportunities to do other things you never had time to do in your organization before the outsourcing or offshoring.
Contracts will not ensure that your IT vendor understands your business, your real pain points and come up with innovative IT solutions.
Contracts will not ensure that your offshore BPO vendor cares about your company and customers rather than meeting Average Handle Time and Average Number of Held Calls metrics in your contract so that they can earn all incentives and avoid all penalties.
This is where going beyond the contract and picking vendors who have a vested interest in going beyond the contract and performing for you pays off even if they may be a little more expensive than others. How do you find such vendors?
In both IT outsourcing and BPO Outsourcing/offshoring it is not difficult to find niche specialists such as Outsourcing Vendors that specialize in Embedded Software Development or Healthcare Claims Processing.
They would have the necessary insights and knowledge that are essential to making the relationship more of a partnership than a contractual one! If they are smaller or medium sized and they specialize in specific niches they have a vested interest in keeping you as a customer and a reference in the longer run!
Contracts are important but they are not everything!
It is a very sobering feeling to be up in space and realize that one’s safety factor was determined by the lowest bidder on a government contract
– Alan Shepard
