Twelve Ailments

1

What is the focus on your outsourcing agreement?* This field is required.12 Ailments | Self-Assessment

The focus is purely on costs.

The focus is on reducing transaction costs and may include service metrics and customer satisfaction metrics.

The focus is on reducing the total cost of the process being outsourced while improving performance and service.

2

The goal of outsourcing to a third party is to?* This field is required.12 Ailments | Self-Assessment

Provide a "quick fix" solution to resolving balance sheet problems.

Provide capability that was not in house in the areas of delivery and/or quality.

Ensure increases in operational efficiency in the areas of technical requirements, cost, schedule and delivery, and quality.

3

Our outsourcing agreements tend to be characterized by?* This field is required.12 Ailments | Self-Assessment

Frequent bidding / continuous search for a lower-priced service provider.

Periodic rebidding of the work, to keep the pricing at or below market.

Built in incentives for to drive down the price while expanding the breadth and scope of the relationship.

4

Our contracting teams focus is to?* This field is required.12 Ailments | Self-Assessment

Win at all costs even if we have to manipulate or coerce the other party.

Stress our terms and conditions and to get what we need from the agreement, with some reflection on the maturity, scope, or complexity of the agreement.

Stress the benefit of win-win over the long haul by moving away from adversarial relationships.

5

The pricing model in our agreement is best characterized by?* This field is required.12 Ailments | Self-Assessment

Charging for transactions.

Transactional pricing with some performance incentives (or penalties).

Financial model that covers costs and reasonable profit and rewards for meeting and/or exceeding agreed-on desired outcomes.

6

Penny Wise and Pound Foolish | Calc

7

Our outsourcing agreement is focused on?* This field is required.12 Ailments | Self-Assessment

Documenting and implementing the “perfect” set of tasks, frequencies, and measures.

Documenting the specifications and service levels for the agreement, giving the supplier some room to change processes with full review and approval.

Working with the partner to develop and document services that meet our needs.

8

Our agreement would best be described as?* This field is required.12 Ailments | Self-Assessment

A document containing all the possible details on how the work is to be done including staffing levels to meet the contract requirements.

A detailed set of guidelines that let the service provider know what we want but not necessarily how to do it.

As a set of desired outcomes where both parties’ interests are aligned so that they both receive tangible benefit.

9

We view our service provider as?* This field is required.12 Ailments | Self-Assessment

A source of labor to be managed.

Responsible for the work and for meeting our service levels, but not to change things on their own initiative.

A source of new (and better) ideas and processes who will improve our service levels.

10

When we outsource it is most important that?* This field is required.12 Ailments | Self-Assessment

We get what we want, when and how we want it at the lowest possible cost.

We reach our service levels at the best cost.

We both work together on solutions that meet our desired outcomes.

11

The Outsourcing Paradox | Calc

12

Our outsourcing agreement is best described as?* This field is required.12 Ailments | Self-Assessment

The service provider is paid for every activity they perform.

The agreement has some performance or achievement based elements for which the service provider is compensated.

The contract is an agreement based on desired outcomes that explicitly state the results on which the service provider will be compensated.

13

The agreement addresses activities by?* This field is required.12 Ailments | Self-Assessment

The service provider is not given any incentive to reduce the number of non-value-added activities.

The pricing model does not inherently drive overall cost reductions by eliminating non-value-added transactions but may include some elements of gain-sharing as incentive to reduce costs.

The agreement is designed to reward the service provider when the desired results are achieved with incentive payments that boost its profitability.

14

The Activity Trap | Calc

15

Our agreement is best characterized by?* This field is required.12 Ailments | Self-Assessment

Employees will go to great lengths to hunker down and stake territorial claims to certain processes that simply “must” stay in house.

Buyer is duplicating overhead through over-proscriptive process management.

Buyer recognizes it may leave money on the table through over management and by dictating processes.

16

Our approach to innovation and process improvement is?* This field is required.12 Ailments | Self-Assessment

Buyer retains its “best” employees stay on board to manage process changes.

Service provider is reluctant to invest in innovation or to propose new processes because of the risk of lost revenue or margin, especially if the work could be bid out.

Service provider is open-minded and accountable for driving internal process changes that drive total cost reductions that will benefit all.

17

Overall our agreement results in?* This field is required.12 Ailments | Self-Assessment

The buyer getting what it contracted for—but it is not really what it wants.

The buyer begins outsourcing to achieving its desired outcomes, but quickly focuses on the lowest cost for an activity.

The service provider is encouraged to optimize for the desired outcomes which will ultimately lead to additional profits if performance objectives are met.

18

The Junkyard Dog Factor | Calc

19

Our attitude toward our agreement can best be described as?* This field is required.12 Ailments | Self-Assessment

Positive at the outset, but satisfaction and performance levels drop over time.

The relationship overall is positive and scorecards are green, but the buyer is frustrated that the service provider is not bringing the cost and service level improvements it expected.

Overwhelming positive, the relationship becomes more collaborative and beneficial, expanding beyond simply meeting the requirements of the original outsourcing agreement.

20

Our level of satisfaction with performance is?* This field is required.12 Ailments | Self-Assessment

Overall dissatisfied with the service levels and productivity, want to switch to a new supplier.

Satisfied with the service levels and productivity, but don’t think we are keeping up with the industry.

Extremely satisfied we are at the top of the industry in performance.

21

Now that we are past transition our focus is?* This field is required.12 Ailments | Self-Assessment

To maintain contractual performance levels.

To improve performance where an incentive is earned.

To achieve our joint performance goals and achieve desired outcomes.

22

The Honeymoon Effect | Calc

23

The buyer’s approach to the agreement is to?* This field is required.12 Ailments | Self-Assessment

Hammer the service provider for cost reductions every quarter or year.

Set targets for cost reductions with a shared-savings incentive.

Allow the service provider to earn additional profit above and beyond the industry average for achieving this incremental value.

24

The service providers’ approach to the agreement is to?* This field is required.12 Ailments | Self-Assessment

Offer up the savings in small increments over time in response to price reduction requests.

Achieve just the amount of improvement needed to get the incentive.

Apply brainpower and possibly financial investments to address the buyer’s needs.

25

In our agreement it is more important that?* This field is required.12 Ailments | Self-Assessment

Transaction costs go down over the life of the agreement.

The lowest transaction cost is achieved from the start of the agreement, even if the cost stays the same over the life of the agreement.

The total cost of the service goes down, even if the transaction cost goes up.

26

Sandbagging | Calc

27

Our approach toward our partner is?* This field is required.12 Ailments | Self-Assessment

If something is good for them, then it is automatically bad for me.

If it is good for them it may be good for me, too, however I have to protect my interests first.

The sum of the parts is better when combined and we work toward the same outcomes.

28

We negotiate from?* This field is required.12 Ailments | Self-Assessment

A position of power, we expect to win so they will lose.

A position of self-interest, what’s-in-it-for-me (WIIFMe), and compromise, we want what is best for us but will accept less if needed.

A philosophy of what’s-in-it-for-we (WIIFWe), because only by working together can everyone succeed, unlocking a greater opportunity than currently is realized by either party.

29

The Zero Sum Game | Calc

30

Our performance management process is best described as?* This field is required.12 Ailments | Self-Assessment

There is no formal governance process to monitor the performance of the relationship.

Scorecards or dashboards used to measure performance to the Service Level Agreement (SLA).

A formal governance process is used to monitor and actively improve performance.

31

Our performance program?* This field is required.12 Ailments | Self-Assessment

Has no definition of success.

Measures transactions, activities and headcount, rather than outcomes.

Measure outcomes that align with corporate goals and objectives.

32

The metrics in our agreement?* This field is required.12 Ailments | Self-Assessment

Track costs but are not linked to the savings negotiated.

Track cost and total savings but do not ensure that negotiated savings actually are realized on the bottom line.

Track incentives to total cost savings over time versus initial savings negotiated.

33

Driving Blind Disease | Calc

34

Our agreement is designed to?* This field is required.12 Ailments | Self-Assessment

Allow a small army, providing general supervision, to measure everything.

Create a culture of limited oversight, which measures what is important.

Create a culture of insight, not oversight, focused on desired outcomes which have supporting metrics that objectively indicate whether the outcome has been accomplished or not.

35

Our metrics can best be described as?* This field is required.12 Ailments | Self-Assessment

It is difficult to impossible to manage the volume of metrics being used.

Metrics linked to activities and processes that measure achievement of the contractual service levels.

A limited number of carefully linked measures and targets that, when achieved, clearly define success for each firm.

36

Measurement Minutia | Calc

37

Formal review meetings are held?* This field is required.12 Ailments | Self-Assessment

Infrequent or no review of performance with partner.

Quarterly business reviews are scheduled, but commonly held once or twice a year.

Quarterly business reviews held regularly.

38

Our review meetings focus on?* This field is required.12 Ailments | Self-Assessment

Operations and performance issues often with limited or insufficient data available.

Performance reviews and improvement targets.

A set of key metrics (5 or less) that form the foundation of performance measurement, transformation projects, outcomes and incentives.

39

The goal of performance measurement is?* This field is required.12 Ailments | Self-Assessment

Metrics have been established for the sake of having measures.

Firms have not jointly thought through how they will be used to manage the business or drive performance improvements.

Metrics are used to drive improvements, not just to monitor performance. Focus is on business transformation.

40

The Power of Not Doing | Calc

41

What is your methodology for onboarding new people to the relationship?* This field is required.12 Ailments | Self-Assessment

Standard human resources training and "learn as you go" that focuses on team members tasks/job, but not the relational aspects.

Joint review with partner of responsibilities provided in the current agreement to provide a balanced perspective of who does what in the relationship.

A comprehensive joint review of the "why", "what" and "how" (including responsibilities of each party) of the relationship to give context of the partnership with your partner.

42

How are decisions made in your partner's organization when it comes to this strategic partnership?* This field is required.12 Ailments | Self-Assessment

The department head/executive in our partner's organization makes all decisions with little input from us.

The department head/executive in our partner's organization considers input from us, but often makes decisions that are in the best interest for their organization versus the partnership.

Decisions are made in collaboration with our business partner using a holistic "what is best for the partnership" mantra, always balancing short term goals with shared vision and longer term goals of the partnership.

43

When it comes to the leadership/executives at our partner's firm...* This field is required.12 Ailments | Self-Assessment

it seems they are always changing and it is hard to tell how our partner's organization make decisions.

there is a fairly stable leadership/executive team and we can somewhat predict how they make decisions.

there is a stable and trusted leadership team. When an executive is replaced they are onboarded with regards to our strategic partnership and how decisions are made.

44

New Sheriff in Town Syndrome | Calc

45

What are the highest priorities of the management team?* This field is required.12 Ailments | Self-Assessment

Heads down manage-for-today focus to assure the "doors stay open and the lights stay on".

Mostly tactical 'manage-for-today,' but there is some focus on looking ahead to ensure near term shifts in needs and responses can be made to maintain current performance.

A balance of 'manage-for-today' and 'manage-for-tomorrow,' with the management team being chartered to proactively look ahead for changes in the business and market, and working operational changes as needed.

46

Which of the following best describes your governance structure?* This field is required.12 Ailments | Self-Assessment

There is no formal governance process to monitor priorities and performance.

One or two people manage all aspects of delivery and performance.

Separate roles to manage service delivery, transformation, agreement compliance and relationship management.

47

We view our contract with our partner as…* This field is required.12 Ailments | Self-Assessment

something the lawyers create and we put in a drawer and hope to never pull out.

an administrative necessity to protect our organization and document our partners requirements.

a living document which guides our partnership in obtaining a shared vision and mutually defined outcomes.

48

Strategic Drift | Calc

49

First name only:* This field is required.

50

Last name only:* This field is required.

51

Your role:

52

Agreement name:

53

Email to receive your customized report:* This field is required.

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