HfS Network

Why we need to stop boring ourselves to death and focus on what really matters: building TRUST

November 20, 2014 | Phil Fersht

Suddenly, everyone is a bloody analyst.  I must get at least five posts a day from a completely random selection of individuals attempting to educate me on how robotic automation, digital technology, IoT, big data and outcome-based pricing are going to be the biggest game changers to disrupt the business world since the invention of the desk.

Suddenly, there's going to be minimal need for human labor anymore, so we'll just sit at home all day running our lives from our mobiles devices sequencing our own genomes using some cool analytics app that we only need to pay for once we've added 10 years' to our life expectancy. Somebody please shoot me now... let's dial this dialog back to reality for a few minutes.

During our Blueprint Sessions in a very, very chilly Chicago this week, we started with the vintage discussion, "How can we re-set these stale services relationships to drive more value beyond labor arbitrage and standard operational delivery". Yes, the old chestnut conversation has to take place, just incase there has been a dramatic, unexpected shift in these relationships in the last six months. But, alas, as per usual, most service buyers in the room were still pacing the treadmill of operational ordinariness with little clue how to move the needle.

So we asked them one very simple question:

Click to Enlarge

Oh my god.  After all the whining about things like, "All they do is sell to us", and "All that cool stuff they promised us during the sales process and never delivered"... the real reason behind this stagnation is the simple fact that most buyers are just struggling to let go!

So there we have it, folks.  Rather than spend another minute reading the latest riveting diatribe about how "big data is about mining meaningful insights", let's focus on the real issue at hand here: TRUST.  Why do 43% of buyers today admit they need to give up more high value work to their service providers to drive value into their relationships?  Quite simply, this is an admission from buyers that they are scared of change - they worry that giving up control to a third party will minimize their own value, and their provider simply does not make them feel comfortable enough to take more of a risk.

The Bottom-line: The biggest disruptive trend on the horizon is TRUST

The solution, then, is simple:  service providers need to earn that trust - and prove they can enhance the value of their clients' governance teams by taking on higher value work from them.  This means many need to change behaviour... the overselling needs to stop and the demonstration of real value needs to start.  Service providers need to take a long, hard look at the personalties of their account managers to make sure they are providing consultative value to their clients.  Service buyers do not "let go" until they know they have a safe pair of hands to trust with their beloved processes... so let's refocus on the one real business value item that matters:  TRUST.

Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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1 Comments

19 Comments

  1. Chris Thompson
    Posted Nov 20, 2014 09:32 AM | Permalink Reply

    Amen to that, Phil!

  2. Georgina Wright
    Posted Nov 20, 2014 11:38 PM | Permalink Reply

    Phil,

    I enjoyed reading this. I agree trust is the main factor here, but doesn't this go both ways - the client needs to trust their provider, but the provider also needs to trust their client as a long term partner?

    Georgina

  3. Manish Mehta
    Posted Nov 21, 2014 01:31 AM | Permalink Reply

    Add to that list...AI, smart cities, 3D printing etc. We must recognize also that the only reason some new trends matter is because services sourced do not exist in isolation; that outsourcing lies at the intersection of multiple threads -Including new technologies and their adoption into both the service provider and the client environment-so we need to spot the more appropriate and relevant (delivery automation, digital for example) and incorporate on CI cycles.

    It will perhaps help buyers if they find a way to actually evaluate the service providers that are able to incorporate technologies/service trends ahead of the curve (not the hyperbole and the promises)...without that their will be doubt.

    Regarding higher value process and business solutions that buyers may not seek of their vendors - service providers are not solution providers yet, if they did provide the high impact solutions that pushed their customers a notch above in their vertical markets, surely the relationships would move to that direction. Since solutions have to be created uniquely, the problems are evident and of course agree it starts from the sales and relationship interfaces.

  4. Larry Cummings
    Posted Nov 21, 2014 04:35 AM | Permalink Reply

    Phil, has it right again - "solutions have to be created uniquely...and start from the sales and relationship interfaces.

    Having partnered with dozens of HR vendors I see your point. I've been collecting those that can be trusted and can support transformational HR not mere transactional form automation.

    Today is my last day with a great ATS. I'll again be building solution stacks for best-of-class transformational vendors - platforming w/ www.EMPTrust.com onboarding. They have more than trust in their name!

  5. Phil Fersht
    Posted Nov 21, 2014 07:10 AM | Permalink Reply

    @Georgina - the corny quote here is that it takes two to tango. However, it all depends on the competitive nature of the service. If the client has a highly unique set of service needs that require heavy attention and investment from a provider with unique capabilities, then they need to be prepared to create a lucrative, trusted and collaborative partnership for the right provider to make the appropriate risks/investments.

    If the area is relatively standard, and there are other providers which can deliver similar quality services at lower pricepoints, then the customer is holding the cards for selecting the provider they feel can be trusted to deliver the quality they need and take on higher value work.

    It's the law of supply and demand - and appetite for risk - here,

    PF

  6. Ayoob Rawat
    Posted Nov 22, 2014 05:53 PM | Permalink Reply

    True - information overload is a big problem for me as I always want to learn. The reality is that to grow a business one must stay focused and not be distracted. Building trust however can only be achieved by professionals who are themselves trustworthy and to whom personal integrity matters. Thank you for the article which confirms my suspicion that I am being dragged into other businesses' agenda instead of staying focused on mine.

  7. Claire Callaghan
    Posted Nov 23, 2014 10:54 PM | Permalink Reply

    Hi Phil. I couldnt agree more. I have just completed a short piece of MBA research on ITO relationships interviewing professionals and conducting a survey of 81 non-execs frm the int'l IT community. The majority said their businesses were (or had already) placed emphasis on proactively identifying and implementing relationship practices which support trust between partners. They also qualified which practices worked best and are most valuable. Technology is not quality service until the people behind it feel and trust that it is.

    Claire Callaghan

  8. Phil Fersht
    Posted Nov 23, 2014 11:46 PM | Permalink Reply

    @Claire: "Technology is not quality service until the people behind it feel and trust that it is". Quote of the day :)

    PF

  9. Durgesh
    Posted Nov 24, 2014 12:29 PM | Permalink Reply

    Time to launch Hfs BCTMM - Building Client's Trust Maturity Model ;)

  10. How To Deliver More Value | The Productive, People, Places And Teams Blog
    Posted Nov 25, 2014 06:58 PM | Permalink Reply

    [...] HfS article sums up the conclusion nicely: So there we have it, folks.  Rather than spend another minute [...]

  11. The raw truth about outsourcing: 83% of outsourcing customers would not go back, despite three-in-four failing to achieve value
    Posted Nov 30, 2014 11:28 PM | Permalink Reply

    [...] nature of their relationships.  As we revealed last week, a good number of buyers (43%) admit they should give up more high value work and responsibility to their providers,  but are struggling to let go because of the change and trust issues at play. However, when [...]

  12. Stop Buying Into Boring Tech Hype and Focus More on Trust
    Posted Dec 01, 2014 01:55 AM | Permalink Reply

    [...] title of the post, “Why we need to stop boring ourselves to death and focus on what really matters: building TRUS...kind of says it [...]

  13. Shaun Dunphy
    Posted Dec 07, 2014 09:09 PM | Permalink Reply

    The key for me is that trust is mutual and has to be earned. What kills trust are:

    1. Unsubstantiated assumptions made by both parties at the start of the relationship.
    2. Mismatch between word and deed.
    3. Treating all work as transactional commodities without understanding the lifetime value of the customer/service provider.
    4. Failure by the parties to understand and adapt to each other's business culture.

    The need to "let go" is a complete subject in its own right. I've experienced it first hand as both a customer and a supplier and it isn't easy to solve. There are always underlying reasons. It could be that the retained team have not been given sufficient organisational change management support, i.e. nobody has told them what they should start/stop/continue to do, therefore they carry on replicating and checking work that should have been transferred. This is made worse where internal practices varied before the sourcing decision. Although the new service provider will hopefully have standardised, streamlined and automated the service to some degree that message may not have gone back to the customer's businesses/ divisions/ departments. The result is that they will try and "correct" the process back to the way it used to work for them. Holding the gains/efficiencies can be extremely difficult without effective OD interventions.

    Maybe service providers need to step up to the organisational change challenge and offer better change management support rather than pure business process re-engineering and technology?

  14. Barbara Sullivan
    Posted Dec 08, 2014 05:09 AM | Permalink Reply

    The critical underlying issue is our industry's retrograde approach to performance management, and it's role in inhibiting the Service Provider "partnership". We are stuck in an inherently distrustful, therefore contentious, "vendor management" model, where KPI's have become statistical nightmares or irrelevant. These detailed numbers, visited quarterly if at all, rarely establish and deliver outside the box results based on common goals.

    A better approach would be to learn and practice Management by Objectives, which requires clarity on everyone's part, and when executed well, results in the two teams on the same side of the table. Earning Enterprise facilities managers' trust requires more than merely completing the assigned tasks in a timely manner. It requires the Service Provider to operate on the clients' behalf, with enough knowledge and commitment to the clients' objectives to anticipate and envision an approach that will enhance service delivery - even if the solution means less billable hours.

    "Partnering" means pro-actively bringing to the table new ideas that are sensitive to the corporate culture, bringing in change management as a part of the practice rather than as an afterthought once the contract is signed, and listening to all levels of the client base rather than showing up only to sell. True partners support their client by eagerly offering up the materials that will help the client advocate for the Service Provider process and relationship.

    The future of Service Provision will be based on an authentic effort to evaluate what it means to be true partners, developing the skills and practices that will allow our industry to mature from Vendors to Trusted Advisers. As with any committed relationship, either side can unilaterally chose to take the first step.

  15. Time for outsourcing service providers to tone down the sales BS
    Posted Dec 11, 2014 02:01 AM | Permalink Reply

    [...] service buyers have made it clear they’re happy they outsourced and admit they should give up more high value work to their providers. So what is holding them back? Why don’t they trust them enough?  Is it because they are [...]

  16. Dallas, we have another problem: Too many Advisors are Buying the Service Provider Hype
    Posted Feb 11, 2015 09:55 AM | Permalink Reply

    [...] expect maybe a 10% delta between buyer and advisor, as many relationships struggle because of the buyer’s failure to entrust their provider with higher level work, but a delta of 20% is simply [...]

  17. Dallas, we have another problem: Too many Advisors are Buying the Service Provider Hype - Enterprise Irregulars
    Posted Feb 11, 2015 09:30 PM | Permalink Reply

    [...] expect maybe a 10% delta between buyer and advisor, as many relationships struggle because of the buyer’s failure to entrust their provider with higher level work, but a delta of 20% is simply [...]

  18. The raw truth about outsourcing: 83% of outsourcing customers would not go back, despite three-in-four failing to achieve value
    Posted May 15, 2015 01:30 AM | Permalink Reply

    […] nature of their relationships.  As we revealed last week, a good number of buyers (43%) admit they should give up more high value work and responsibility to their providers,  but are struggling to let go because of the change and trust issues at play. However, when […]

  19. Time for outsourcing service providers to tone down the sales BS - Enterprise Irregulars
    Posted May 15, 2015 01:58 AM | Permalink Reply

    […] enterprise service buyers have made it clear they’re happy they outsourced and admit they should give up more high value work to their providers. So what is holding them back? Why don’t they trust them enough?  Is it because they are simply […]

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