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Keeping Your Outsourced Teams Close

As U.K. organisations continue to increase their outsourced and offshore resource leverage, more in-house managers are facing a dilemma around how to effectively manage people over whom they have little control and/or compensatory influence. Indeed, most outsourcing contracts involve stipulations that the 'client' company shall not circumvent the internal performance management systems of the outsourcer. Conversely, many in-house managers feel that it is not their role or responsibility to provide leadership or managerial support to non-employees.
Some questions we often hear include:
- I am the customer... why should I tailor my work style to accommodate the outsourcer?
- Why should I exert any effort in providing my outsourced and/or offshore team leadership or managerial guidance?
- How can I hope to have any influence on people who are not my direct reports?
- Does any of this matter if we have an SLA (Service Level Agreement) driven contract?
The answers to these and similar questions lie in developing an understanding around what you are trying to accomplish. For example, if you're getting everything you need with respect to delivery, quality and even your own job satisfaction, there may be little return in exercising soft skills. If, however, you find it difficult to work with your team, they suffer from high turnover, or poor delivery or quality, its worth looking into.
Tailoring your work style. As with all managerial strategies, the goal is to get what you want from your team. Remember that contractors have probably worked for several businesses, under varied contracts and completely different levels and types of exposure to in-house managers. As with any team, structure remains important, and tweaking in the short term can lead to long-term productivity.
Making an effort. We have many incentives to nurture our direct reports, as their success is often considered a reflection of our own management and leadership ability. With third party contractors, however, we rarely, if ever, get that kind of satisfaction. That incentive aside, the effort is hardly wasted. A strong people-centric management style can increase loyalty (essential in reducing churn and getting maximum effort on those 11th hour deliverables) - and it can help attract the right kinds of people to your outsourced team. Remember, when it comes to in-house teams, you generally have little ability to make changes. When dealing with an outsourced team, you may have incredible flexibility to recruit stronger talent from within the outsourcer.
Managing influence. Outsourced resources often report to three or more managers... a commercial manager who is responsible for maintaining the client relationship at a macro level, a people manager who may act much in the same way as a mentor or traditional manager, a project manager, who is responsible for the day to day execution and oversight, and, of course, you, the "customer manager". Maintain regular contact with these people, and try to understand their motivations. These are the managers who will ultimately reward, discipline, improve, retain (or replace if necessary) your resources.
...and doing it even if you are in an SLA-bound contract. SLAs are fantastic for achieving organisation- or engagement-wide objectives. However, they often do little for program or project managers looking to meet their own goals and objectives. Nothing is a commodity when people are involved. Effective management of your outsourced team will not only get you more out of your resources, it can help you get the best resources available within the outsourcer. It's great to have escalation paths and remediation clauses - but it's even better to never have to use them.

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