Once all the hard work has been done and the contract is agreed and signed, more often than not the relationship goes into one of business as usual with little time spend on reviewing the original goals and intent of the deal. What you knew at the start of the relationship is different to what you know now. Are those goals being met? Are they achievable?
In most cases, we see companies reviewing the effectiveness of an engagement at the end of the contract term, whilst considering a renewal, or when something has gone wrong. Mid-term review or early on in any engagement is good practice but more regular assessments are needed.
It sounds obvious, but we need to steer our outsource contracts like we would any other project.
With the right metrics both parties can look objectively at the status and make timely changes. Absence of factual insight can lead to reduced service, missed deadlines, budget creep, and a fundamental erosion of any trust and goodwill in the relationship.
So, what goes wrong? ... and what should we focus on?
I've worked on both sides of the fence and typically the focus remains on faster time to market, lower costs, high quality and improved visibility. These should not be ignored but should be factored into a higher level dashboard view of the original goals, developed and communicated in a way that the senior stakeholders can stay engaged.
In addition to any contractual commitments there are a number of factors that steer a relationship to success. These factors will differ from contract to contract but will typically be: the continued alignment of the contract and business intent, the continuity and management during any transition of responsibility, and maintaining the win-win relationship between the parties themselves.
Managing the contract is not all about the contract itself
Collaborative working and improving relationships with practical initiatives aligned with the original goals are also important. Both parties set out with a strong desire to make the deal succeed and made commitments to each other. Work on maintaining these commitments and continue to build a strong relationship throughout the term of the contract. You'll either make sure the original goals are met or have early warning when it's not going as you expected giving you time to steer things in the right direction.