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Characteristics to Look for in Selecting a Retained Organization

by Kevin Coleman

In outsourcing, we often focus entirely on the incoming service provider team and the transitioned employees without thinking through the skill sets required for the retained staff assigned to work with and manage the relationship with the service provider. Even the best service provider in the world can be derailed by a poorly performing client-retained organization.

Here are the ISG Top 5 characteristics to look for in selecting employees to work with the new service provider as part of the client governance organization:

1. Technical competence. Retained employees must have a sound understanding of the underlying technologies and be able to assess service provider reports and suggestions. However, when evaluating employees for this role, keep in mind that technical competence is not the same as technical brilliance. Brilliant technologists often consider their highest contribution to be a technical one and may not relish the relationship-building function of governance teams.

2. Ability to see and understand the big picture. Steer away from employees who are prone to distraction by small upsets. At any moment in almost every client-service provider relationship, there are a number of things going well and a few areas of difficulty. The difficulties certainly require attention to detail and management focus, but successful retained employees handle these within the context of the total relationship and remain positive and professional in their interactions.

3. Demonstrated ability to work through influence rather than to exercise direct authority. One of the underappreciated jobs of a retained team is to manage the demand for the service provider’s services from the business units. Up to 70 percent of a retained team’s energy is spent working with business units to moderate requests for new services and to support adherence with the newly agreed upon work processes. This work requires tact and good negotiation skills.

4. Understanding and acceptance of the goals of outsourcing. If an employee is not committed to the outsourcing program or fundamentally believes that the outsourcing is a mistake, he or she will not be able to authentically convey enthusiasm and confidence to the business units or the service provider team. In the worst cases, resentful employees continually seek to demonstrate incompetence of the service provider by magnifying small issues or errors, which can lead to relationship failure.

5. Genuine interest in taking on the retained role. A position in the retained governance organization isn’t a consolation prize. It is a valuable role with significant influence on business results. The most successful team members see their role as a step forward, with the opportunity to work on a larger scope with measureable outcomes, and appreciate the leverage that their new role provides through the ability to influence the service provider account team.

Selecting retained employees with these attributes will produce a strong business-centric governance team that can work with the service provider in a mutually beneficial contractual relationship. Contact Kevin Coleman to discuss further.

About the author

Mr. Coleman brings extensive global experience with over 35 years in both regulated and non-regulated business operations. Kevin has been either client or advisor in 6 large scale outsourcing negotiations including 3 large facility management transactions, and has advised two global clients on transition and governance organization & processes.