Multiple EquaTerra research studies have concluded that financial services organizations plan to expand their outsourcing initiatives into new geographies, business units and emerging processes more than other industries. The firm’s research also found that organizations in this industry are among the heaviest users of IT outsourcing (ITO) and business process outsourcing (BPO). These findings, as well as financial services industry outsourcing satisfaction levels, complexities, drivers, anticipated benefits and a wide range of other topics are detailed and analyzed in a new EquaTerra perspective paper titled, “Outsourcing Trends in the Financial Services Industry.”
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Meeting expectations is a key component of any business relationship, especially when it comes to an outsourcing partnership. Come to think of it, it is indeed the key for effective performance of an organization at all levels. A lot of us mistake it to be just meeting the goals that the customer has set, and therein lies the paradox. A relentless pursuit of meeting these expectations leads to what has been aptly titled as 'The Paradox of Excellence' by David Mosby and Michael Weissman. The Paradox of Excellence says that the better you do your job, the more invisible you become - to everything but bad news. At the same time, your perceived value erodes as customers lose sight of the problems you relieved.
First of all, let us evaluate the way the outsourcing industry has evolved. The initial waves of outsourcing in terms of Manufacturing services and Information Technology revolved around successful operations to take advantage of low wage and low skilled labor. Then came the outsourcing of Business Processes which was relatively complex. A lot of the initial work that was outsourced was easy to perform; rules based, and could be easily automated. Automation of a lot of these processes led to lower cost, increase in productivity, consistent quality scores and greater customer satisfaction. Then came the adage of 'Delighting the client' and the focus shifted to process improvements and value additions. The increase in competition and globalization opened up new competitive markets, and served as differentiators that led to a pursuit of excellence. It was the resulting process improvements and value additions that provide organizations an edge over its competitors.
From a client perspective, buyers of outsourced services have outsourced their work, have seen great results, experienced great cost advantage and an increase in customer satisfaction, and are now expecting more. The outsourcing vendor has delivered results, performed process improvements, achieved specified goals time after time, and is doing it 'easily'. The paradox comes into play when there is a lack of awareness about the process that was followed to reach the goals during this relentless pursuit of excellence. How do you overcome the paradox? If the data regarding lower cost, greater productivity gains and increase in customer satisfaction is presented in a PowerPoint slide, the client will be delighted; however, without a proper explanation of the efforts that went into achieving the same, it will lead to greater expectations.
These expectations are more than just the 'requirements' and are also the primary measures of your success. It becomes quintessential in a business relationship to have clear goals, seamless communications and a clear understanding of the process that was followed to reach these goals. However, during this relentless pursuit of excellence, the business partners tend to miss out on certain basic aspects of managing expectations. Result: The metrics end up driving the outsourcing vendor rather than the vendor driving the metrics.
So, the question is how does one manage them?
- Understand how these expectations were set. Is it a business decision that is driving these expectations from a client perspective or is your projection of the work leading to these expectations?
- If the source of the expectation is the client, you will need to understand the rationale behind setting these expectations by working closely with them. If you are the source, you will need to revisit the way you are projecting your results
- If a particular process improvement or initiative has led to great results, it is always a good idea to educate the client on the effort, time and expertise that was required to develop the process, even if it means that you need to talk about various analytical tools. It helps the client in understanding and appreciating the value that you bring into the service.
- Monitor the expectations, track them through your daily/weekly calls with the client and brief them about the challenges and opportunities
- Provide the client with as much information as possible in regard to the complexity/nature of the work
- If the expectations are not realistic, the key will be to act on them as soon as you get to know them. The longer the period of your inactivity the stronger the perception that it is achievable. Maintain an expectations document (this can be part of the Statement of Work) and discuss it with the client. This process will help the client analyze their current expectations vis-a-vis their initial expectations.
This will help the client in setting realistic expectations for you, value the effort that goes into the service delivery and to see you as a true extension of their business. Remember, you have to manage the expectations and not the other way round.
Biju Pillai
The author is the Director, Operations at Motif, Inc., a specialized BPO (Business Process Outsourcing) company providing rules based and decision intensive back office transaction processing services, customized email response services and internet research & analysis.
(www.motifinc.com)
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