Rise in Responsibilities

Research says that the sourcing & vendor professionals are burdened with more responsibilities in additional to their usual activities. They are expected to deliver more effectively & efficiently & utilize their experience and expertise on new activities. Sourcing professionals are now venturing into product development with increasing scope of responsibilities & new stakeholders have started relying on them. Sourcing & vendor management professionals use different tools & applications for their clients & usually they manage the front end of the tool. But since the client requirements change very often which makes the system change in its core. SVM professionals converse with the customers & do the necessary requirement gathering for the tool. But the actual development & coding is done by the back-end people (developers) who are very often not visible of the project scope & its implementation. This two level downward information is usually not communicated appropriately & often it is misunderstood by the developers at their end.

To counter this approach, SVM professionals are now required to do all the activities right from the requirements gathering process to the development of the same. This helps cut the barriers of miscommunication between professionals & allows implementing the process which was initially incepted. Organizations are now hiring such SVM professionals who can be utilized in the above process & are able to accept the additional set of responsibilities entrusted on them. There are instances wherein the SVM professionals are required to work from onsite or from home. In such cases the SVM professionals are required to work with HR & develop a communication policy for the increasing number of resources working away from office. Also the SVM professionals are working with HR to hire such resources whose have the required skills & expertise which can be utilized in multiple ways.

SVM professionals are also venturing into the marketing domain to increase their knowledge as well as their visibility of the company’s brand. Clients are constantly in touch with their marketing heads & looking out of new opportunities as well as existing ones where they can grow their business. Through these marketing professionals, the clients get to know the different aspects of growth as well as technology being currently used in the market. So to counter this situation & help build a strong relationship with the client, SVM professionals have started to broaden their scope horizon & are proactively seeking knowledge in the market. SVM professionals need to come up with a robust & effective process with the latest technology to offer to clients & maintain client relationships in the long run. This entire process can take a long time initially to setup & might also require the involvement of third party to a greater extent. Once the process is in place, with the right SVM professionals the process will be smoother & efficient & thus it’ll help bring SVM & development team closer together.

Existing Customers – Companies Greatest Asset

In the olden days the focus of the sales department was about increasing the number of products or services they sold, at all costs. This obsolete approach was often to the loss of building long-term customer relationships, and failed to maximize the potential of their client base.

Nowadays, the prototype is very different. The most successful organizations are those that understand the true value of nurturing relationship with the existing clients and reaping the tremendous advantages as a result. They have learnt the value of trust based selling, and revealed that it not only increases returns but decreases marketing costs, resultant in a tough bottom line.

In today’s fast-paced and aggressive environment, with the global economic slowdown win win is the only game to play. Companies which learn this theory fully, and maximize the exposure of technology in their marketing strategies, will go on and flourish. Any organization that needs to measure their customer relationship needs a health check in terms of their customer relationship model, ought to implement policies, procedures and measures along these lines:

–          Regular and quality communication is maintained with their existing customers

–          Measures are taken to show true commitment to meeting their customers’ needs

–          Building long term relationship strategies

Many companies make two important and common mistakes; they spend huge sum in an continual and repeated drive to find new customers, and don’t spend enough time and money keeping the best ones they already have. Consumers will always prefer to buy from companies who make them feel cherished.
It’s important to emphasize that we have been talking about sales and marketing strategy with existing clients.

Outsourcing Agreement

After selecting a vendor client needs to start preparing for next big phase i.e. entering into outsourcing arrangement with the vendor. This includes penning down terms and conditions of both vendor and client.
Outsourcing agreement / contract should include, but not be limited to the following:

1. Terms and Conditions:
   1. The duration of contract should be mentioned.
   2. Detail payment schedule should be mentioned and agreed upon by both parties.
   3. Termination / Exit clause for both sides should be included.
2. Expected Service:
   1. Client should be very clear and specific regarding the services that they are expecting from the vendor.
   2. Timelines and milestones should be decided and agreed upon by both parties.
   3. Measurable goals and objectives of this venture should be clear and agreed upon by both the parties.
   4. Fluctuations in work depending on peak season, new ventures that client wants to implement during the course of contract etc. should also be considered.
   5. This might also get attached with another document like Service Level Agreement (SLA) which will have Key Performance Indicators (KPI) and metric to measure them.

   Note: SLA lays down expected performance standards in details, It has measurable metrics to identify weather desired services are provided or not, It also includes penalties in cases desired services are not met etc.

3. Warranty and Insurance: In outsourcing contract vendor will be expected to work on client’s site. In such as scenario there is possibility that any act / omission on vendor’s part may cause some damage to client’s property / personnel / data. As a contingency plan it is always advised to have warranty from vendor stating that any damage caused to client will be borne by the vendor. Similarly it is advised to have insurance policy to cover damages.
4. Disclaimers: This section covers clause like
   1. Vendor is not responsible for any indirect, direct or incidental damage caused due to use of third party software or service.
   2. Vendor will not be responsible for work or delay in timelines due to non corporations of personnel from clients end.
5. Force Majeure: This clauses excuse a vendor from liability in case any unforeseen event occurs which is beyond the control of vendor and which prevents vendor from performing its obligations under the agreement. Generally, Force Majeure clauses cover natural disasters and other “Acts of God”.‖
6. IP: It is essential to identify who owns the IP before transition starts. It is recommended that this is part of the agreement.
7. Rebaging: If client wishes to retain some of its personnel then it needs to inform vendor regarding it and gain its acceptance. Details of how this will be executed also need to be documented.
8. Sub-contracting: In case vendor plans to sub-contract then terms and conditions of same should be agreed by both parties and documented.
9. Security: Protection of client’s confidentiality, data and property should be covered in agreement. Penalties in case of failure should also be covered.
10. Governance: Methodology to create, manage and maintain the relationship between vendor and client should be mentioned.
11. Third Party Software: This should cover clauses like
    1. Who will provide L1, L2 and L3 support for the software (vendor / software company)
    2. Is the cost covered in the pricing or this will be additional cost to client (this includes license).

Contractor or Consultant

Consultants are supposed to work on projects, rather than open-ended contracts, so they are expected with completing something, not simply doing it. In contractors case it can be said that they are very much focused on delivering results. Consultants come in teams so can take a more integrated approach to bigger projects: contractors have to be managed by the client. Consultants are known by their brand, the quality ‘stamp’ which means that they meet an acceptable standard – although many clients now evaluate individual consultants as in case of contractors or employees.

Consulting firms use contractors much as clients do to deal with peaks of activity or to provide short-term, specialist input which it doesn’t make sense to have in-house on a permanent basis. And that’s happening more and more: consulting firms are telling that utilisation levels are high; many are quietly but constantly shedding staff whose skills aren’t in demand; lower margins mean that recruitment usually comes after a large piece of work has been won rather than before it.

There are two quite obvious problems with this. The first is that consulting firms are no better than their clients at flexibility: the consulting firm may add value in many ways, but this is not one of them. The second, and perhaps more important, problem is that both clients and consultants are making use of the same contractor market. There is no need for only a consulting firm to do the job. Contractors can be hired, even recruited, by clients; ‘consultants’ are supposed to be something different, a rarefied beast that comes trailing clouds of experience in their wake. But the issue is not simply that consulting firms are trying to pass off contractors as consultants (and charge accordingly); it’s that if a consultant is someone who isn’t readily available in the contractor or recruitment market, then many of the people who are currently working for consulting firms may be in danger of being seen as contractors by their clients. They’re just not expert, or different, enough to be seen as a insufficient resource by people who themselves are former consultants.

As concluding line it has to be said that “Contractors can be hired, even recruited, by clients; ‘consultants’ are supposed to be something different.

Rebadging

Whenever company outsources its services to new provider, they feel that they should retain some key personnel who are currently working on the said services (or have been part of building the current service). In such scenarios company enter into a contract with the vendor which states that vendor from their end will re hire the key personnel which company wishes to retain. This process of re hiring of personnel is called as rebadging.

Company View:

Thanks to outsourcing it is now vendor’s responsibility to ensure that that service is up and running all time. And to ensure that the vendor get proper know-how of the service they have asked vendor to re hire key personnel

Vendor View:

They will have to evaluate key personnel (which company wishes to retain) and re hire them as their personnel (i.e. personnel will be on vendor’s payroll and all management / grievances will be addressed by them). Evaluation will include interviews, back ground check salary negotiation etc.

Resource View:

In order to get rebadged they will have to send across their CVs to the vendor team, pass the interview and then renegotiate their salary.

In a nut shell resource will be doing the same work (in most cases) but now he/she will be working as part of vendor team and not part of company.