4 Key Questions in the Relationship Compass

  1. How Deep Should the Relationship Be?
    • What is the strategic importance of this process now and in the future?
    • How complex is this process?
    • How much change do you anticipate in this process over the life of the contract?
    • How interdependent is this process with other processes in the firm?
  2. How Broad Should the Relationship Be?
    • Is the value in this process created through specialized expertise or through technology and repeatable routines?
    • How tightly interconnected are the activities within the process?
    • To what extent do you want to change this entire process?
    • To what extent does your own firm have the management bandwidth to manage multiple providers?
    • To what extent do you need a provider with market power to get the benefits you’re seeking?
  3. Whose Way of Working Should We Use?
    To what extent are we seeking each of these objectives:
    • Learning from the provider
    • Rapid implementation of standardized capabilities
    • Redirection of management focus to other areas
    • Access to new technology
    • Scale-driven cost reduction through standardization and centralization
    • A process that operates at the level of best accepted practice, in contrast to a highly customized or leading edge process
  4. Whose Assets Should We Use? (Physical Assets, People, Technology Tools)
    Does the organization or the outsourcing provider (OP) have:
    • Better access to advantaged assets–lower cost, higher quality, or both
    • A lower cost to acquire assets
    • Unique expertise in acquiring and managing assets
    • More opportunity to share assets with others to improve costs and handle fluctuating demand
    • Better ability to invest to maintain or improve asset quality
    • In addition, how important and difficult is it to integrate these assets with the organization?

Business Process Outsourcing Big Bang: Creating Value in an Expanding Universe
by Susan Cantrell

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