An essential factor for a strong start in outsourcing is ensuring that all the parties involved are on the same page. And to accomplish that, everyone needs to be transparent about their work. But with many outsourcers located in different regions from their clients, this can be hard. So, how do you build a culture of transparency with your outsourcing partners? Let’s take a closer look.
What Transparency Truly Means For Outsourcing
The first thing we need to work out here is what transparency means for startup companies and their outsourcing partners. Of course, we already know the basic meaning of the word. But you should dig deeper to better understand its essence in outsourcing relationships.
Here, the biggest impact of greater transparency is in ensuring that everyone does the work correctly. Your partner needs the right set of information to do their tasks right. You being transparent about your work processes also helps them avoid mistakes that can affect performance.
On the other hand, your partners being more transparent makes it easier for you to track their work. It also allows you to guide them towards your desired direction. This symbiotic relationship allows both of you to accomplish the work more efficiently.
Building Trust
Developing mutual trust between you and your outsourcing partner is another driver for greater transparency. This is the case with remote and offshore outsourcing. Due to the distances, you cannot inspect your partner’s output directly. With a good degree of transparency, your partner can work without you having to oversee them constantly.
They also gain something from that mutual trust. Since they see that you are open to them, they are encouraged to work more proficiently. Your partner also sees the business viability of providing you with additional services. All of this helps pave the way for a stable long-term relationship.
Defining Transparency In The Partnership
Aside from understanding what transparency can bring to your outsourcing efforts, you also need to know the degree of transparency you want to cultivate. Keep in mind that it still has its limits. There are some aspects of the business that you might want to keep from third parties.
Meanwhile, outsourcing parties are aware that they only need a certain amount of information to do their work effectively. You sharing more information than required can confuse them as they try to figure out which ones to use. That results in a lot more security concerns that both of you have to deal with.
Another important consideration here is defining what your intention is for increasing transparency. Both you and your outsourcing partner should know well why you are committing to the effort. For instance, you can state whether this would be purely for monitoring purposes. This also prevents you from pushing for the wrong kind of transparency during the partnership. You would want to discuss this early on to manage the expectations of both parties better.
A Strong Start To Building A More Transparent Partnership
So, where do you begin when building a more transparent outsourcing relationship? You would want to do this systematically to ensure proper implementation and long-term success. For that, you need to go through these steps.
Creating Better Contracts
To get a strong start building more transparency into your outsourcing relationships, you need to pay attention to contract development. These documents serve as the basis of the whole partnership. Thus, you should incorporate comprehensive transparency provisions here.
One such provision to include is service level agreements. These provide outsourcing partners with a detailed picture of what you expect from them. The SLAs also define the other obligations that they need to accomplish for you.
Another section you need to make clear within the contract is the ownership of the project. That section helps both you and the outsourcing firm keep track of who is responsible for the different sections of the work. Additionally, make the rules for the transfer of ownership clear.
Promoting Transparency Through Design
Once the contract has been developed, your next step is to build the framework for your outsourcing effort. Here, you would want to incorporate mechanisms to help foster transparency. That way, it becomes inherent in the setup, helping both you and your outsourcing partner better adapt to it.
Start by doing an inventory of your existing service provider relationships. You will be able to map out the different risk domains associated with a specific provider. From there, you can determine the degree of transparency that each provider needs to maintain.
Image from ResearchGate.You would also want to develop an integrated risk and controls framework based on the above inventory. That framework indicates the different risks associated with a particular provider. You then detail the control mechanisms for each of these risks.
Another important design consideration is how to optimize reporting. Promoting auditor reports is one effective way of doing it. Such reports remove the need for you to make multiple information requests at different instances.
Paving The Way For Long-Term Outsourcing Transparency
Once you have all of the above elements, your goal is to build upon them for long-term implementation. One thing you need to remember here is that outsourcing relationships can change in the long run. Your transparency framework should be able to adapt to those changes readily.
For that, you need to project how far into the contract your stated transparency principles will be applicable. Explore how different kinds of changes will affect these principles. From there, you can develop additional measures that can help you adapt to these changes faster.
Lastly, remember that not everything that creates transparency can be incorporated into a definite contract. For these, you need to develop a separate code of practices that you and your partners are ready to adopt. Encourage discussions between both sides to further develop that code into something that everyone can fully embrace.
Be MORE Transparent For A Strong Start In Outsourcing
We at Virtua Solutions Outsourcing put a lot of value in maintaining a transparent working relationship with our clients. As such, we go on a lengthy discussion on this matter with new clients. So, be ready to talk with us about your transparency strategies to get a strong start working with us.