How Transition Affects Overall Outsourcing Relationship

Successful transition is probably the most challenging phase in an outsourcing relationship. Before transition is initiated both vendor / client are planning, estimating and assuming. However, once transition kicks in and actual work starts, both parties begin to realize gaps in their plans, estimations and assumptions. Few important aspects to watch out for during transition are:

• During contract negotiation, transition team (from vendor side and client side) is fully focused on the outsourcing initiative. However, once contract is signed and SLAs finalized important stakeholders may shift their focus on other items on their task list. This may sometimes cause problems when transition starts.
• Once the contract is signed and actual work begins the complexity of transition phase becomes evident. More personnel from vendor and client side join in the daily transition work; this actually tests the robustness of the communication and governance plan. Stress level on both side rises, milestones are missed and deadlines crossed. Client starts to realize the gap between what they envisioned and what vendor understood. On the other hand vendor is constantly struggling to reach steady state as per timeline and also meet the expectations of evolving business. This is the most crucial phase that decides success and failure of transition and over all outsourcing relationship.
• By the time transition is over, client form their opinions regarding vendor. This opinion is completely dependent on how transition was planned and executed. This opinion / view point is difficult to change and sometime reflects throughout the engagement relationship.

Outsourcing relationship which has gone sour during transition can be re-build by initiating dialogues between both parties, involving management teams from both sides, hiring a their party consultant to analyze problems and suggest recommendation. The last resort is to replace entire transition management team from both sides.

About Author:

Tina Nebhnani is consultant and part of Systems Plus Pvt. Ltd. She is a part of consulting team that delivers Sourcing and Vendor Management Office projects. She can be contacted at: tina.n@spluspl.com