Who are you guys?
Selecting Outsourcing Vendors
SPICE is the metholodology I have developed alongside some of the leading minds in the industry to strategise, procurement, implement, manage and improve outsourced operations. SPICE is an acronym for "S" - Strategy, "P" - Procurement "I" - Imlementation, "C" - Control & Innovate and "E" - Exit. It is the lifecycle for managing outsourcing contracts. .
I am the founder of call-centres.com with over 23 years of helping organisations to improve the quality of their outsourcing. I was the first person in The UK to gain a Masters Degree specialiaing in outsourcing. I am a published author, a regular speak on contact centres and contributor to publications around the world.
control and transform - the key to managing outsourcing contracts
Here's a challenge for you! Read a series of books about outsourcing. One thing which is unfathomable to me as an indstry expert is how less is written about management of outsourced suppliers than any of the stages which preceed it in the outsourcing lifecycle. There are some (actually many) who believe that the key factor to outsourcing success is the pricing mechanism, the legal contract or the choice of vendor. I can tell you categorically that it's almost always easier, cheaper and less risky to fix a broken relationship than to set up a new supplier. Even if the contract is poorly constructed or you feel that you have the wrong supplier, you can still make huge improvements to a project simply by making a number of changes.
Traditional outsourcing models not only place a low significance on management but they also focus completely on the wrong areas. To understand why this is so, it is important to understand the history of managing call centre suppliers. When the industry first started to grow rapidly in the 1990s, most supplier management was laissez-faire in that they didn't do much. Of course, the industry was new and many didn't know what they could do which impact the contract in a positive way. Over the next decade, this changed dramatically. In sectors such as utilities, financial services and telecommunications, there were a series of high profile compliance failures. Consumers had been mis-sold and misled by both inbound and outbound call centres. It was at this point that suppliers started to put in what I refer to as "control measures". They would ensure that processes were adhered to, risk was measured and that financial performance was considered. Supplier management grew in both importance and size. Despite this, many projects failed to perform and so the third generation of theories were developed. These involved relaxing the intensity of the management but instead focussing on what they considered to be a more mature way of management. Supporters of this approach would say that they would empowering the supplier. Many clients liked these new theories. They could reduce the amount of money spent on management and potentially achieve higher outputs. However, for many companies, this is a step too far. They still want to be able to audit their suppliers. They still want input as the process is still an integral part of their business.
The difference between these 2 sets of theories is that 1 focusses on control and the other on innovation. SPICE allows you to have both. The control measures which are generally similar to those in the traditional theories are still in place but they are set up to establish a clear framework within which the supplier can operate. Only by having a very organised and disciplined approach can you then provide the environment in which innovation can flourish and this is what makes SPICE so powerful.
There are a number of things to consider when incorporating SPICE. Firstly, the management of a contract is an art and not a science as presented in the other theories. The science itself is fairly simple. The following picture shows how SPICE works.
In this picture, the areas of supplier management are broken down into 4 areas. The basic areas are the functions which need to be performed by the client in order for the supplier to operate. This includes ensuring that they have access to the latest training materials, product information and systems access. The audit components assesses areas of risk and compliance and also ensures that the amount being paid is in line with the contract. The improving components are when the true value comes in. This is where the system of encouraging, assessing and deploying innovation comes into its own. It seeks to drive value into contracts using a systematic approach. It's not particularly complicated to adopt. It's simply a series of best practice methodologies which enhance performance. Underpinning all of these areas is the "relationship" component. The client's staff who manage the suppliers need to be skilled in assessing situations and build true and deep relationships with the supplier which can drive innovation and control performance.
If you would like to discuss how to manage contracts better, please contact me on 077400 96598