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Onboarding service providers

Successfully onboarding service providers into your ecosystem.

When your company outsources services to a service provider, there are certain elements related to the onboarding of that service provider that require specific attention to ensure that your organization can get the maximum value from outsourcing.

These elements are:

  • Information: we will exchange as much information as possible during the onboarding of that service provider.
  • Relationships: through onboarding we want to set the tone for a successful relationship, in which collaboration is key.
  • Transition: the goal of onboarding is to facilitate and guide the transition.
  • Trust: we want to stimulate trust in the service provider through transition guidance.
  • Human factor: in the transition from an old situation to a new situation (change), the attitude and behavior of people and the culture within the organization must always be taken into account.

To ensure that your organization gets the most out of the services provided by the new service provider, it is best to set up an onboarding process. During this process, you will fully inform the service provider of your needs, provide insight into your assets and processes so they can tailor their services to your needs. Finally, you draw up a step-by-step plan, where communication and collaboration are central.

Unfortunately, there is no “1 size fit all” process, but based on our experiences with customers, we provide you with the high-level steps of an onboarding process, including a number of key success factors.

Due Diligence

The goal of due diligence is to give the service provider full knowledge of your needs. This is done through a thorough assessment of your capabilities to identify the details, risks, pain points, opportunities and inefficiencies.
This step also provides the service provider with insight into your assets and business processes in order to tailor the services provided to your needs. A number of key success factors during this phase are:

Always start by creating a service catalog. Without this, the operational model cannot be fully designed. The service catalog must contain the business services, the IT services and the individual components. All this mapped out with clear dependencies and characteristics. The service catalog should make clear what is delivered and what the related costs are.

It is important that both the service provider and the customer have a shared vision of success. “Shared success” here refers to a win-win for both the customer and the service provider. A number of aspects are very important here:

  • Clarity: The chance of successful onboarding of a service provider is small to non-existent if there is uncertainty about the goal/result to be achieved. This also applies if the responsibility and liability to achieve this is unclear. Therefore, it is important that everyone is on the same page with regards to the goal.
  • Competence: Clarity is one thing, but being able to achieve these goals is something else. Each party must be able to achieve these goals.
  • Circumstances: Successfully achieving the result is influenced by all kinds of circumstances. Some circumstances will influence this positively and others negatively. It is important to identify and address any obstacles or hindrances in a timely manner.
  • Commitment: it is important that all parties commit themselves to achieve these goals
  • Communication: Clear communication about the vision and goals is absolutely necessary.
  • Collaboration: Collaboration is very important in the ecosystem

Collaboration can be defined in a collaboration agreement, in which we find the following parts:

  • The definition of collaboration
  • The objectives of collaboration
  • How the different parties will work together
  • The responsibilities within this collaboration
  • How we are going to measure that collaboration
  • Possible incentives to promote collaboration

It is important that such a collaboration agreement treats all parties fairly and does not set limits on effective day-to-day operations.

We have an increase in complexity in terms of service management processes, because the customer has processes with a certain maturity, but all the service providers also have processes with a certain maturity. It can be that there is a big difference with regards to maturity level.
First and foremost, it starts with mapping the current processes of the customer and the current processes of the service provider.

Then you continue aligning these processes end-to-end. Here you look for example at how you will work together if you have a problem on which multiple service providers have to collaborate. Or see what information you are going to transfer for change management for example: are you going to show each change of the service provider in your change calendar?
Furthermore, you will have to define clear roles and responsibilities for these end-to-end processes, using a RACI table.
You will train all people with roles in these end-to-end processes, but also coach and adjust where necessary.

In an environment with multiple service providers, each having their own tools, it is a must to have a tooling strategy. As such there are 2 options: either the current service management tools need to be adapted to enable collaboration with multiple service providers, or a new tool will be chosen. Whichever way you go, the following elements are important:

  • Seamless integration: Working in 1 shared toolset would reduce the complexity of integration, but of course this is not always possible. When working with different tools one of the most important elements is the seamless integration with other tools. This allows you to exchange real-time incidents, problems, changes or request tickets with different systems between different service providers.
  • End-to-end workflow: e.g. for handling service requests across providers.
  • Shared data dictionary: There is a need for a common data dictionary describing and mapping data such as incident priorities, change types, request catalog items. This to ensure that we speak “the same language” and not have to do the translation ourselves.
  • Reporting: Ideally, most of the reporting will come from the Service Management tool, which should act as the single source of ticket data from the entire ecosystem. This “single source of truth” reduces the need for manual data manipulation and provides a solid and reliable basis for all reporting.

Transition planning

During the transition planning, a handover roadmap is drawn up to the new service provider, in which collaboration, communication and the human factor are very important elements. The availability of resources and budget must also be taken into account.

A number of key success factors during this phase are:

It is important to create a project plan with milestones, timings, tasks, resources and dependencies. By defining milestones, timings and dependencies, you can measure the progress and success of the transition. By adding up a resource plan you can manage the resources and tasks to guide the transition. Scheduling go/no-go decisions are also important to move to the next stages of the transition plan.

Of course, communication is a key success factor in every phase, but the reason we mention it here is because you have to take it into account in your transition plan. Because an onboarding of a service provider does involve some organizational change, it is important to create awareness among the existing employees and provide enough training and coaching.
A part of that awareness is communication. It is important that you define your target audience per communication and draw up a communication plan. After each communication you evaluate the effect of this communication and have some lessons learned to take into account in your next communications.
All parties can only work together optimally if there is transparency towards each other. Which information and to what extent is then part of your communication plan.

Transition Execution

This is the actual onboarding of the new service provider in the ecosystem. A number of key success factors during this phase are:

When we take a look at the 4P’s of service management (people, process, partners and products) I don’t have to tell you that people is one of the most important P’s while onboarding a new service provider.
An important aspect when working with multiple service providers is to make sure you have a culture that supports this. You have to take into account the attitude, behavior and culture of your organization and therefore also the employees. Part of this culture is building relationships across different levels of the organization and service providers so that collaboration, trust and partnership is central.
The success of such an onboarding also depends on the knowledge and experience of the resources involved. During the transition execution you need different skills ranging from operational skills to soft skills and expertise in the legal part of outsourcing. Again, it is important that clear roles and responsibilities are defined during this execution phase.

when you outsource abroad, you have to deal with cultural diversity. Important here is that you take the time to get to know each other and respect each other’s values and norms. This by entering into a dialogue with each other.

An important part of the collaboration between the different service providers is also sharing knowledge. Therefore, a clear scope and objectives need to be established: which knowledge are you going to share, which target audience, …
As with internal knowledge sharing, it is important to have standards and agreements around the creation of knowledge. For this you can use the KCS (knowledge centered service) principle, which gives you guidelines on capturing, structuring, re-using and improving knowledge.
In short, there must be a consistent approach to the creation and sharing of knowledge, in which clear roles and responsibilities are necessary.

Run & Improve

Once the transition is done, the operating model comes into action. It is during this “Run & Improve” phase that the real value of outsourcing the services must be achieved. Next to the day-to-day operations and the coordination of the service providers, the detection and implementation of improvement initiatives are important parts of this phase. An important key success factor during this phase is encouraging positive behavior.

KPIs and measurements can be a source of frustration in an outsourcing environment because each party has a different way of defining and measuring ‘success’, or because an inconsistent method is used to measure them at different service providers. That is why it is important in the first instance to capture shared success and make agreements about measuring success during the due diligence phase, but measurements are also important during run and improve.

The way we measure our collaboration with our service providers has a major impact on their way of working and their behavior in dealing with each other and the customer organization. Your measurements should encourage positive desired behavior. By positive behavior we mean:

  • Improvements
  • Collaboration
  • Focus on the business and its needs
  • Customer focus

On the other hand, you must make sure that your measurements do not encourage negative undesirable behavior, such as:

  • Silo Thinking
  • Inflexibility
  • Lack of empathy

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Jordy Mertens

COO – Senior Service Management Consultant