This is the second of two articles on the subject of the role of Intelligent Client Function (ICF) teams in managing the all too often complicated supplier/client relationship. The first article was titled ‘The 8 Intelligent Client Functions Skills to Drive Value in Supplier Relationships’ and was published here on our site earlier this month.
That article focused on the reasons for needing a strong client-side ICF team, the importance of finding the right people with the right expertise to form that team, and the skills they should possess in order to be most effective.
This article carries the theme forward with our top tips based on years of observation of both successful and less than successful ICF teams, so you can avoid some of the common pitfalls that could cost your organisation dearly.
Four key lessons we’ve learned for putting together the right client side ICF team
1. Carefully consider the skills and knowledge you will need within your team.
A detailed understanding of the service(s) being outsourced, the ability to clearly quantify business outcomes, contract and expectations alignment, supplier responsibility awareness, appreciation of the supplier/client relationship dynamics, legal expertise, change management and supplier relationship development – and who should be responsible for these tasks. Too much responsibility on any one person’s shoulders creates a weak structure that can put unnecessary strain on the team. Adequate resourcing should not be under-estimated, particularly where large and complex/high risk services have been outsourced.
2. Keep the team fully resourced.
In our experience, an effective ICF team will save you a minimum of 2.5% to 8% of the total end-to-end annual costs of external service delivery, depending upon its size and complexity. At the very least, keeping an effective team in place will ensure you continue to deliver strong value throughout the life of the agreement. When you consider that nearly 50% of outsourcing agreements fail to achieve expected business outcomes, then you can see the value in having a strong client-side ICF team guiding, managing, maintaining and monitoring the relationship and its outcomes.
3. Provide ongoing training for your client-side team.
In these days of austerity, training budgets are often the first to be cut with the benefits being viewed by senior management as ‘soft’. However, in our experience, strong client-side ICF teams that receive regular training deliver up to 35% more financial and quantifiable value – annually – than their counterparts who do not enhance their knowledge and skills through regular training.
In addition consider that:
- Two out of three UK workers have changed jobs because of a lack of learning and development. An organisation’s investment in training is often seen not only as a reward, but as a vehicle to promotion by many in the workforce according to a recent report. Talent retention can be vital to the continued viability of your team structures. Therefore, failure to recognise an opportunity to cement your relationship with staff, through training, can have very damaging repercussions.
- If your teams are failing due to a lack of training, this will not only affect morale; it can also impact on your standing with clients, board members, shareholders and your reputation in the supplier marketplace.
- In today’s world of unprecedented change, you may need to step out of your comfort zone and think differently as to how to attract and retain the right talent. According to research by Egon Zehnder, organisations need to build a system that exposes employees to both old and new practices so they can see what is best and incrementally adapt. Leaders need to push to initiate work programmes that can create a real sense of ownership, as employees with an ownership mindset are likelier to tap into their creativity and be more willing to participate and make positive transformation happen. This should boost your team performance and productivity.
4. Hire for initiative, not just for technical skills.
The technical skills identified in point one above are of course very important. But these alone are not enough for an effective ICF team. Initiative is an essential ingredient within every successful ICF team as it provides the ability to look beyond what is needed now in order to develop new and insightful strategies that will see medium- to long-term improvements.
I’d like to sum up with a word of caution: some client organisations abdicate their own responsibility to govern and hold their suppliers accountable for business outcomes once their service delivery has been outsourced. While your suppliers have their own agendas and targets, it is up to your organisation to ensure that you manage your supplier relationship to (a) drive strong innovation in service delivery, and (b) hold the supplier to account for its performance – both good and bad.
To effectively manage such a partnership requires technical knowledge, skill, experience, innovation, strength of character, and most important of all, initiative, from those in both client side and supplier teams. Anything less could mean that your organisation loses control of the quality of service its clients/customers judge it by. If this goes unchecked, the resulting breakdown in your client/supplier relationship, and its knock-on effect on your business reputation, is likely to be anything but favourable.