Once the client and the service provider have inked a Business Process Outsourcing (BPO) deal, the first implementation step is transition. Whether called lift and shift or Business As Usual (BAU), the idea is that personnel and services will be transitioned to the provider as quickly and efficiently as possible. Ideally, by the end of the transition period, the provider will have implemented everything it needs to deliver, and report on the services as specified in the contract in other words, they will have achieved a stable state. But it doesnt always work like that.
Transition is difficult by its very nature. Personnel moving from the client to the provider may experience anxiety and emotional loss. Their colleagues who remain with the client may also experience disruption, loss and confusion. The provider will bring in a new account-management team that in many cases is unfamiliar with both the client and the contract. They must learn to work with the clients governance personnel, who may also be new to their roles.
Simultaneously, services may be moved to new facilities, and new metrics, reports and operational procedures may be put in place. Often, baselines and service levels must be validated during this period before going live at the end of transition. And transition can be short varying from three to twelve months, but typically six months from the contract-effective date. Taken together, the learning curve is steep, the amount of change is daunting and the time period is short is it any wonder that the end of the transition period often finds both clients and providers exhausted, angry and dissatisfied?
The paradox of transition is that while it is guaranteed to strain the new BPO relationship, it sets the parameters for how successful the relationship can be in the future. A poorly executed transition can set a negative spiral in motion that is very difficult to reverse, leaving the participants feeling abused and hopeless. On the other hand, when done well, transition can create a strong relationship in which the parties discover that they have the ability to face difficult problems together, and overcome them in mutually beneficial ways. This is perhaps the single most important ability for and indicator of long-term BPO success.
The key to a successful transition is two-fold. First, avoiding as many problems as possible through good preparation and second, by building the strengths needed to productively overcome the problems that cant be avoided. Problem avoidance has been discussed in detail in other writings, and includes things such as negotiating a strong contract; designing, building and supporting an effective client governance team; bringing in an experienced provider-transition team that is sensitive to the clients unique needs; and provider account-management personnel dedicated to customer satisfaction. Assuming all these things are in place, there are still a number of difficult problems the joint provider or client governance team must confront and resolve during the transition period. How these inevitable problems are solved is as important to long-term BPO success as the solutions themselves. However, few governance teams enter transition with a well-developed plan for healthy problem resolution instead, they ride the optimism of the new relationship and assume all will work out for the best somehow. Entering transition recognizing that problems are inevitable and that how they are resolved is crucial to success, rather than expecting a blissful honeymoon, prepares both client and provider governance teams for the challenge of making the most of the opportunities disguised as problems and the friction they create.
The friction BPO creates, particularly during transition, can be the crucible that produces creativity and innovation that neither organization can develop alone. Although some people consider this incremental friction overhead that argues against outsourcing in the first place, a recent Harvard Business Review article asserts the opposite that the friction inherent in outsourcing can be the catalyst that extends a companys competencies and spurs innovation. And while innovation is rarely the main driver behind most BPO initiatives (savings usually is), it is often a desired outcome, particularly in a transformational BPO. Client leadership enters such agreements believing that the relationship will result in the best of both worlds taking root in the shared-BPO workspace creativity and mutually beneficial solutions thriving where the status quo once prevailed.
Unfortunately, when the necessary investment to make this happen is missing, what occurs during transition is just the opposite what you might call dysfunctional friction. In some cases, that crucial investment may be time taking the time to anticipate expected problems and building an approach to solution development that will allow the joint-governance team to avoid dysfunctional friction and develop productive friction. Such an approach must recognize that the content of the solution is separate from the method by which it is obtained, and that the way solutions are developed is as important, if not more so, than the solutions themselves.