Page 291 - Global Project Management Handbook

14-16 MANAGEMENT OF GLOBAL PROGRAMS AND PROJECTS

opportunities. During the outsourcing activities, employees may go through several
change management classes. Managers also should be encouraged to hold meetings
with their people to keep in touch. Having employee counseling services available is
also helpful.
A structured planning will lead to a structured transition. Studies show that when
asked what they would do differently in structuring their outsourcing relationships, both
buyers and service providers respond that they would do more upfront planning for the
transition phase. A white paper published by SourceNet groups the pitfalls during the
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transition phase into five categories :
Pitfall 1: Inadequate knowledge transfer. During the transfer of operations, as soon as
the provider vendor comes into play, a drop-off in service levels is inevitable, even if
the provider performs the work correctly and efficiently. There are valuable aspects
beyond the mechanical transformation. Outsourcing undermines some of the informal
relationships that were built with customers by the outsourcing company. A partial rem-
edy to this pitfall is adequate transfer of knowledge. The first step is documentation of
the business structure of the organization, including the protocols and procedures.
Especially in large organizations, the actual process of jobs may not be exactly the same
as the documentations. In this case, the best approach is to insert a validation step into
the documentation, where the provider vendor’s employees are trained in the physical
environment in which the business is conducted. By one-to-one training, knowledge
transfer can be performed in a collaborative environment.
Pitfall 2: Inadequate measurement of service-level performance. The company may
encounter problems with its customers when the provider vendor falls short in the per-
formance levels that the company used to provide before the process was outsourced.
The vendor may be meeting the contractual service-level specifications but does not
concentrate on specific metrics. To prevent lack of satisfaction among customers, the
company needs to provide a baseline of performance during the transition phase.
Pitfall 3: Lack of response-scenario planning. Going into the transition with the
assumption that everything is planned is a pitfall. Contingency plans must exist against
potential disruptive events that possibly can appear during the transition phase. A
scenario-response plan, similar to a disaster-recovery plan, is the best approach. The
company should know where to look if extra resources are required during the transi-
tion phase and should designate who will be in charge of updating the organization and

resolving pressures. A scenario-response plan is beneficial to avoid chaos in case an
adverse event happens.
Pitfall 4: Lack of executive sponsorship and staying the course. A pitfall that organiza-
tions run into is lack of sponsorship from senior management. As a result, the transition
stage is either hindered or ends with a breakdown owing to the loud noise that comes
from the parties that disagree with the outsourcing decision. Sometimes the decision-
making executive announces the decision and leaves the organization thereafter. An
effective approach is to have the chief executives lead the strategic changes, not the divi-
sion or department managers. The executive should stress the commitment and respon-
sibility toward the achievement of the objective. Weekly performance reviews by the
executives and the people who are responsible for tactical execution strengthen the
process.
Pitfall 5: Lack of flexibility. Occasionally, the service-level specifications and operating
definitions in the contracts are based on assumptions. These assumptions may be wrong,
and recalibration may be needed. Flexibility can be ensured by a review and tightening
phase around the contractual service-level specifications that lasts for a predefined
period of time during the transition state. If recalibration is needed, the contractual com-
mitments can be refined on mutual agreement.