Focusing on SLAs Reduces Discussions for Business Results

A recent survey by Accenture (ACN) and the Shared Service and Outsourcing Network (SSON) reveals that two-thirds of outsourcing clients and vendors admits to giving much attention to service level agreements (SLAs) instead of discovering broader business outcomes.The survey specifically reveals that 42% out of the 600 respondents generally admits to giving more time on discussions of SLAs rather than focusing on the apparent business results. While another 25% says that although they spend a generous amount of time for SLAs, they are gradually turning back on this habit.Tom Pettit, Accenture's managing director of North America business process outsourcing, pointed out the importance of SLAs in client-vendor relationship when transforming to outsourcing. He expressed that SLAs are vital in business engagements like outsourcing. The risk though is that in these SLAs, more focus is given to operational inputs rather than the business results.With the results showing that 58% of the respondents acknowledge that clients and vendors’ primary motive in undertaking this business strategy is for lower operations costs, Petit expressed concerns that if players in the outsourcing realm make cost reduction as their main reason for outsourcing, they lose their chance of exploiting opportunities for business agility, flexibility, and responsiveness. He furthered that it is critical to have defined objectives upon venturing in outsourcing. Make sure to clarify motives on the onset of implementing this innovative strategy.Since customers and service providers face outsourcing challenges such as globalization, economic situations, and technological changes, key players remain confronted with pressures on going about business transformations. For them to stay afloat, organizations should bear in mind to balance and aspire for innovation during the whole course of the management process.Furthermore, the survey showed that a lot of outsourcing customers are derailed from outsourcing BPOs due to factors like resistance from inhouse employees and lack of alignment. As what was confirmed in the said survey, 28% answered opposition from workers is commonly their greatest challenge in executing shifts in service management. We are all familiar that shifting from traditional to the outsourcing business model means interference in the already existing working habits. There would also be changes in conventional roles and responsibilities. Given the complicated nature of this problem, clients and vendors should strive to maintain a focused and sustainable consideration on their management processes. According to the survey, some other struggles of customers result from lack of support from management and the middle managers.Fifty percent of the respondents of the ACN survey admitted that their organization has many challenges yet to face. Surprisingly, the result of Accenture’s survey is aligned with that of IDG Enterprise Outsourcing & Service Providers' survey. In the ACN survey, it was revealed that 13% of the respondents rate their service delivery strategy as very effective while in the IDG survey, 25% believes that their service management practices are superior.  In the IDG survey, majority of the respondents think that they are fairly effective and only 12% answered that they are not in any way effective.