Vendor Management

Introduction

• Outsourcing contact centers is both a desirable and in many cases necessary step for companies wishing to control their costs and improve performance.
• However, making outsourcing relationships work can be challenging, and requires an investment in management infrastructure to maintain quality and independence while continuing to innovate and drive down costs.
• Kindcare Services allows you to build a relationship with your suppliers and service providers that will strengthen both businesses.
• Vendor management is not negotiating the lowest price possible. Vendor management is constantly working with your vendors to come to agreements that will mutually benefit both companies.

Challenges Faced by the Outsourcer

• With their large subscriber bases, high volumes of customer interactions and high growth rates, many companies have outsourced their customer contact centers with high expectations of labor savings and access to specialist expertise.
• Outsourcing companies have often found that the promised benefits in terms of cost and quality have not materialized. Worse, some of the contracting models under which they have outsourced have led to a misalignment of objectives with their vendor.
• Vendors are encouraged by these models to increase usage of their services, at the expense of providing quality and innovation for their customers.
• Contracts and service-level agreements (SLAs) are often unable to cover these eventualities, and in some cases even explicit penalties are not enough to stop vendors maximizing their profitability in this way.

Vendor Management Benefits to Outsourcing Businesses

Typical benefits include:

• Streamlined requisition approval workflow
• Reduced time-to-fill cycle times
• Bill rate standardization / management
• Optimization of supplier base
• Consolidated invoicing
• Improved security and asset management
• Availability of vendor performance metrics
• Visibility and cost control over maverick spend
• 10-20% reduction in contingent labor spend

Analysis – Case Studies

• Many companies experience disappointing results from outsourcing because they believe that by outsourcing customer contact they can radically scale back their internal operational management of customer care.
• They believe that the outsourcing contract alone will drive performance, and that vendors can be allowed to manage, not just the commodity aspects of call handling and contact center staff management, but areas such as training, call routing, quality monitoring and innovation.
• Because the management of these areas of infrastructure has not been separated from the direct management of the contact center, innovation and improvement can grind to a halt in an outsourced contact center relationship.
• Worse, companies may find that the lack of separation of these aspects makes it hard to switch vendors, even at the expiry of the contract.
• While building or acquiring this separate layer of operational management may seem like an additional cost in an outsourced environment, it is the foundation for reaping the many real benefits of outsourcing contact centers.

How do we Excel – Our Success

Kindcare offers advice for driving the best deal with vendors while ensuring a mutually successful relationship. This is achieved by:

• Sharing our priorities with the Vendor. If the vendor can help, they will find a way to provide the best solution. If they can't help, they know they are not part of the priorities at the time. Let them know you will continue to share with them what you need and how they may play a role down the road.
• Create a competitive environment by seeking credible alternatives. Vendors that know they have secured your business are better able to seize control of the negotiations.
• Use vendors to help you build a business case. Using Vendors to help you build support also helps them understand your business and refine their proposal so it better meets your needs. In the best cases, you become partners where success makes both parties look good.
• Treat our potential partners and partners as such, not as vendors. There is a real need to drive contract terms and legal conditions, but in the end, no contract in the world will adequately cover your long-term goals and expectations. We help build a solid, true collaborative partnership with your vendors.
• Finding a right way to build a relationship. Price isn't the only aspect of the relationship. We find creative ways to go beyond the transaction.
• Asking for an ongoing responsibility. To be a partner, both parties must act like partners, which means helping each other beyond the cash exchange.
• Always get competitive bids. From the outset, the vendors are advised that they have to put their best price on the table. No one will get a second chance to rebid.
• We respect your vendors.
• Look to the long term. We look for long term relationship with our vendor partners, and ensure that it is a win-win opportunity rather than for any aggressive short-term gains.
• Negotiate with the top two. After evaluating a number of vendors, we conduct contract negotiations with the final two, not just the final one. That enhances competition, and increases the possibility of a deal breaker.
• Make it a win-win. It's about two organizations getting into a collaborative and mutually beneficial business outcome. If both partners cannot get value from the investment (no matter the scale), then it is the wrong investment or partner.
• Start by defining what the "best deal" means. Kindcare evaluates other approaches when the requirements involve tight time frames, continued support or total value. In most cases, metrics with contractual remedies should be included to be sure the goals are clear and measurable and that the deal was, in fact, the right one.
• Tie guarantees to money. Guarantees aren't worth anything unless there are monetary penalties. They must be spelled out in the contract.
• Focus on value, not price. Before a negotiation, determine what is of value to your firm. We use value analysis to drive the discussions with the vendor - can they deliver this value and then align their price to this?
• Demand proof of concept. We seek value in every business, and hence we need to see it firsthand. We achieve this by making the vendor prove it can be done, hopefully by implementing something at the client location with their people and data.

How does it work? Our Model

Kindcare Services allows you to build a relationship with your suppliers and service providers that will strengthen both businesses. Vendor management is not negotiating the lowest price possible. Vendor management is constantly working with our vendors to come to agreements that will mutually benefit both companies.

• Contracting and Negotiating with Vendors
• Evaluating Vendors
• Managing Vendors
• Metrics
• Vendor Management
• Vendor Strategy

About Kindcare Services

Kindcare Services helps separating the operational management of contact centers from the direct delivery of commoditized contact services, and allows the vendor to concentrate on their areas of expertise while allowing you to retain control of key areas of infrastructure, such as

• Forecasting
• Call management
• Training
• Quality
• Vendor performance management
• Reporting and governance
• Vendor contracting and invoicing
• Transformation and innovation

Achieving the cost and quality benefits of contact center outsourcing requires a creative and balanced contract structure and an operations infrastructure equal to or greater than that required for internal operations. Using this approach, companies can not only retain and even increase control of their service delivery, but take advantage of competition in the vendor marketplace to drive down costs, improve efficiency and re-inject passion and success into contact center performance

The Kindcare Advantage

Kindcare Services helps separating the operational management of contact centers from the direct delivery of commoditized contact services, and allows the vendor to concentrate on their areas of expertise while allowing you to retain control of key areas of infrastructure, such as

• This type of "command center" model with its related operational infrastructure can be maintained in- house or may itself be sourced from a business process outsourcer — the important thing is to maintain and control it separately from the other contracts.
• By separating the management infrastructure it becomes possible to work with multiple vendors, or run an in-house and outsourced operation simultaneously and switch volumes between them on the basis of performance.
• Using a portfolio of multiple vendors allows the creation of a performance-driven free marketplace, in which vendor incentives are precisely aligned to the performance metrics which will deliver the best results to your business.
• Engagement models with contact center vendors are structured to reintroduce innovation into the outsourcing relationship.
• By employing "marketplace" techniques to standardize and commoditize agent-handled calls (as in a commodity exchange), attention can be focused on areas such as customer satisfaction and rewarding contact centers for innovation.
• This structure drives centers to outperform each other in a free market for agent handled calls, with contact center volume automatically delivered to the most capable and cost-effective centers and agents. Again, this sort of structure can be created in-house or sourced from a third party.