Outsourcing: the good, the bad and the ugly. Staying in touch with your suppliers and understanding cultural differences.

Chris McKeown from Aptara

Chris McKeown, European Director Account Management for Aptara outlined the ingredients for a good customer/supplier relationship at ALPSP's Outsourcing seminar today.

The customer must be clear on what the supplier can deliver and any limitations on what the supplier can deliver. They need to avoid the 'yes' pitfall by being clear a supplier won't lose work or damage your perception of them by saying no to something. You have to feel comfortable that the supplier has a clear understanding of the partnership and they know the services the vendor can offer.

The supplier must be clear on the specification for the work and service level agreements (including times and quality measurements). They should understand what feedback and reporting is required as well as what the customer publishes and how the customer likes to work - communication is at the heart of this part of the relationship. Key performance indicators will be based upon communication, service and quality.

McKeown provided a range of tips. Think about public holidays in the country where your supplier is based. Ask the vendor to write up notes/actions to ensure they understand what has been agreed. Also have an escalation list of who to speak to if something does go wrong. Be aware of how an increased  inflow of work can have an impact on quality. Regular vendor reporting and regular calls are a great way to avoid problems.

Laxmi Chaudhry

Laxmi Chaudhry is a Director of 1 Stop HR and a cross-cultural trainer and consultant. She closed the seminar with an engaging overview of communication as the glue for outsourcing. There are several misconceptions people hold about cross-cultural communication.

Do you believe English is a common language? Think again. Jargon, phrases, irony, inference can all be lost in translation. Ask for clarification and confirmation, repeat, put in an email to reconfirm, and don't worry about patronising. That only comes from a tone of voice, not checking what has been understood.

Why does cultural awareness matter? It is about effective communication, language, successful teams and relationships between partners. Motivation and recognition drives higher performance and better collaboration. It also helps you to reflect your market place. It is an effective way of remote working and can impact on your bottom line.

Laxmi suggest that cultures are like icebergs: with explicit/overt observable behaviours above and implicit or covert beliefs, values and assumptions below, which are not easily observable. The key is to understand that what lies beneath is hugely influential on what goes on above. She urged delegates to consider cultural values and how they impact everyday business. Consider the differences in culture on the importance of hierarchy, relationships, context, direct or indirect approaches, how important the group is compared to the individual and the value of losing or keeping face. When you take these areas into consideration, it makes a lot of sense of how people respond.

Other advice included: don't underestimate the importance of non-verbal communication. Check for understanding - don't assume anything. If you are managing important overseas relationships, take steps to work more effectively with partners and have cultural awareness training.

Outsourcing: the good, the bad and the ugly. Selecting suppliers, sales and marketing.

Helen Whitehorn

Helen Whitehorn is Director of Path Projects Ltd and advises organizations on resolving a variety of operational and strategic challenges. She outlined the following five stage framework for selecting suppliers:

1. initiation
2. discovery
3. design
4. deliver
5. sustain

Start with a high level proposal and really think about why you are outsourcing. Which processes, departments and people should be involved? Are there key timings, such as product launches to be considered? When you produce the high level stratregic document. You begin to understand whether you know your workflow and what you require.

After developing your high level proposal, you should move on to a detailed specification and preferred suppliers, get an agreement in place and outline suppliers selected, detail the delivery of work underway, and outline monitoring, control and ongoing improvement.

Lorraine Ellery

Lorraine Ellery is a sales and marketing professional with experience in the information industry. She provided an overview of what to consider when outsourcing sales and marketing. Which services do you want to outsource? If it is market research, are you interested in quantitative, qualitative, industry, market or competitor research? Do you want telemarketing, web, PR and media, social media including SEO/SEM or mailings. With sales, are you interested in direct sales representatives, trade fair representation, telesales or sales support? You can also commission consultancy on strategy, outsourcing, mergers and acquisitions or strategic alliances.

Ellery outlined suggestions for best practice. These include managing expectations and ensuring you have a mutual agreement. A service level agreement is essential and it should be a professional agreement. The vendor should include a comprehensive sales and marketing plan so everyone is clear about what you want to achieve and what is to be undertaken.

It is very important from a sales agent's point of view that they have clear market feedback. This can be provided in various forms, from discussion with sales rep on the ground to monthly and pipeline reporting, that all good sales agents should provide you with. A timely response to any publisher enquiries is essential for building confidence in progress and reporting. She also suggests that you ask for references and percentages where they have been successful.

What does a sales agent expect from a publisher? An indication of budget really early on as it makes a big difference to proposal they make so it is appropriate. Marketing collateral and product information needs to be of good quality. If it doesn't meet the niche market needs, that can be part of the service that can be provided.

Share competitor information that you can that will help with the agreement. Pricing guidelines are key and include detail on pricing for different markets. The agent will be able to help with this. One model for one territory does not always translate well to another.

Consider conflicts of interest around allocation of resources, whether it is complementing or competing, and around internal communication - make sure work is agreed across the organization. Consider the compensation model. Some models are based on the value of sales, some on economies of sale,  others on commission-only models. Ellery cautioned that the latter holds more risk to the agent as it cuts off time to deliver and the lengthy sales process is not always conducive to reward (sales can come in direct to the publisher or via another sales agent). She advises a combination of fee based service with some kind of compensation model.

Ellery has tended to use formal contracts for services, but it can be as simple as an agreement to accept a proposal. The 3 Cs to bear in mind with a contract are commitment, clarity and communication.