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Improving Service Provider Performance

This is one of the most difficult areas for organisations to get right. You’ve invested millions in a technology project or an outsourcing initiative. There are great expectations from everyone; your executives, management team and operations people in achieving much better service levels for a far lower cost.

What happens? weeks, months and years go by. Trials and tribulations of getting both the service provider and your own teams to work constructively for a common end goal; lower costs and better service.

Historically BPG has been regarded as one of the premier project turn around organisations and frequently we are assigned to independently review major projects that are under performing and then to mediate and help in-house service delivery teams to manage the external partners and improve contract performance whilst reducing total cost of ownership and increasing value for money.

Why is project recovery helpful?

Unfortunately there are times that some major programmes, projects, partner agreements and teams are not able to deliver the performance consistency, quality of service or benefits that were originally expected. Relationships become strained and the root causes for under performance can be many fold. they often involve external partners as well as internal teams not delivering to expectation.

The cause could be due to:

  • Your internal teams might not be aligned and thus preventing your external partner from being able to perform adequately
  • Your internal team may not be delivering their own outputs which then has an impact on the external partner’s ability to perform its own outputs
  • Your external partner may not be resourcing the project with the appropriate intellectual skill’s sets
  • Your management team may not be providing its subordinate team with appropriate support and executive sponsorship, thus internal resources become conflicted, stretched and under too much pressure
  • Your external partner may have other conflicting priorities across other clients which in turn has an adverse impact on the outcomes for your project
  • Your external partner may have misinterpreted your requirements and expectations and is having to realign both your and their expectations of outcomes on the project.

The above is only a small example of the issues that arise with projects that are not progressing healthily.

External Partner Involvement in Under-Performing Projects

External partners often represent they have specialist expertise for the project they are undertaking with you. During deployment of the project, you will occasionally be presented with your partner requesting change controls on aspects of the project that your partner perceives you to have either changed, or that were not documented appropriately in the first instance. Your response may well be that the project hasn’t changed and if your partner has misunderstood your requirements then that is a matter for them.

If an external partner has represented itself as a specialist in a given area, and you believe you have relied on that expertise before you entered into an agreement with them, then the partner has three primary duties to you under English (and most other European states) law, whether these are reflected in the written contract or not. Prior to accepting an order from you, the external partner has to:

  1. Identify what they are actually going to deliver on the project
  2. Validate (not just identify) what they are not able to deliver
  3. Validate (not just identify) what the consequential effect is on the project of the items the partner is not going to – or unable to – deliver.

If a partner elects not to advise you, or does not think of advising you of specific consequences prior to entering into the agreement, then as the partner has represented itself as an ‘expert’ in its field, it also takes with it full responsibility to remedy the consequences of any misunderstandings at its own cost, not the cost of the purchaser.

How to Improve Performance

Using the ACCELERATE methodology, BPG has a three step process to improve performance within a matter of weeks – even if the project has been off-track for years. Having been asked to recover over 500 errant outsourcing and technology projects, we understand what goes wrong with the projects, the fundamental causes and how to get them back on track again. Most important;y, we can explain and coach you in how to avoid getting problems in the first place so you can achieve much earlier benefits realisation and cost reduction – even in existing projects.

The performance improvement process involves:

Step 1 : Health Check – Where are you?

  • Analyse the burning issues
  • Interview stakeholders
  • Establish rapport
  • Review documentation and processes
  • Sanity check

Step 2 : Construct performance improvement framework

  • Agree strategy
  • Agree objectives
  • Construct data capture documentation
  • Construct terms of reference
  • Construct contract and schedule changes
  • Contingency options

Step 3 : Deployment and benefits realisation

  • Provide specialist expertise assistence with keeping Service Provider on track
  • Attend key steering meetings
  • Provide on-tap coaching and mentoring
  • Embedded and on-going sanity check

Value realised

  • Significantly lower costs for the remianing term of the agreement
  • Much faster time to benefits realisation
  • No unexpected costs from Service Provider
  • Clear roles and responsibilities
  • Service provider financially accountable for advice provided
  • Both parties protected contractually
  • Fit for purpose services and advice from provider

Related Blog Posts:

  1. How to Renegotiate a Contract with Your Strategic Partner (in 5 Steps)
  2. 6 Steps to Improving Health and Social Care Outcomes at Lower Costs
  3. Multi-Sourcing: 7 Steps to Reduced Costs and Improved Services