Managing existing outsource deals

  • A2 will work with you to implement effective performance management of the outsourced service.
  • A2 will work with you to help maintain strategic alignment and sound relationship governance.
  • A2 will work with you to ensure there are effective processes for integrated operations, contract terms are complied with and both financial and performance reporting are reliable.
  • A2 will work with you to embed sound risk management and control of the end-to end business.

Performance management

It’s often said that “what gets measured gets done” and this is especially true in an outsource arrangement where there is a contractual relationship between the parties. Defining the right performance measures is therefore essential – measures that will incentivise the outsourcer to do the things that will meet the strategic goals of the arrangement and can be measured efficiently. Validation of performance reported is also important – this can be through quality assurance processes within the outsourced operation or independent assurance or a combination of the two – along with processes to manage any performance issues.

Strategic alignment and governance

Once the outsource arrangement is established it is important to ensure that alignment of objectives and interests is maintained. The needs do change with time. For example, an outsource deal originally set up to support growth or service innovation may be unsuitable if the client’s priority changes to cutting costs or reducing headcount. Unless the service agreement was designed to accommodate to such changes, it may need to be renegotiated.

Processes, compliance and reporting

Sound processes are needed for effective and integrated operations, so that the outsourced activities form an integral part of the overall business. Arrangements are needed to promote and provide assurance over compliance with contract terms. This includes processes for accurate financial reporting, billing and sharing of costs and profits in accordance with the agreed terms. Management of ongoing HR matters is also important to ensure performance management and reward processes in the outsourced operation are in line with the service objectives and requirements.

Managing the end-to-end business

A key requirement for effective control is to manage the end-to-end business as one business, not two separate ones. Steps are also needed to manage dependency risks – relying on another organisation inevitably brings financial, operational and brand risks that have to be mitigated. The close working involved may also result in information security exposures, from sharing commercially sensitive information or intellectual property. Finally, sound plans need to be in place for exit from or replacement of the outsource arrangement if needed, whether on a planned basis such as periodic retendering or in response to a crisis such as insolvency of the supplier.

Our specialist expertise can help you ensure the outsourced service remains in line with your business needs and provide assurance that processes are sound and risks are being effectively managed.