Governance Reporting

Making governance documents reader-friendly by using infographics, standardizing terms & major assumptions, ensuring relevance, and using interactive visualization

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In an industry that has changed dramatically over the past decade – expanding beyond a handful of countries, Global Business Services (GBS) pulling together services across an organization under a single umbrella, “as-a-service” delivery models, autonomics and service delivery automation, etc. – one would expect to be hard-pressed to find a component that hasn’t kept pace.

However, one key enabler of effective ongoing client/provider governance has changed little, if at all.

Across the layers of governance, there are multiple monthly and quarterly reports that provide the basis for regular review meetings. But a comparison of governance reports generated over the past year with another set (across different relationships) from close to 10 years ago revealed no major discernible difference in the messaging, format, structure, or – to an extent – the content of the reports. The profound impact of digital and user experience-driven visualization appears to have eluded them altogether!

Some of the issues that were evident in the majority of the cases included:

  • High on data, low on context: As a central theme, most reports have too much upfront data with minimal context behind it. “All green” metric performance is never a guarantee of client or provider satisfaction. Honest and open context actually helps avoid uncomfortable situations during discussions.
  • Inconsistency of structure across towers: In multi-tower engagements there are often inconsistencies in simple elements like type of charts and terminology used, which increases risk of miscommunication between client and provider.
  • Lack of coherence across governance layers: At times, there was lack of coherence and linkage between operational level governance reports and executive/management-level reports for the same outsourcing engagement. Even straightforward items such as FTE numbers and team descriptions failed to tie up in several cases.
  • Resistance to evolution: Even if the entire service delivery has gone through multiple iterations of change, the reporting philosophy seems to be the same in Month 6 and Month 48. Just changing the month-to-month line items containing the metrics is not enough.

All this equates to a lot of time and effort utilized in going through data, with some important subjective discussions being lost or pushed to subsequent follow-up sessions. This can cause a high risk of misalignment in objectives and a potential trust deficit. The situation is aggravated if there are new stakeholders inducted into the governance structure who may interpret similar data in different ways!

Quick fixes

As a principle, any document intended for circulation to a group of stakeholders should be clear in its objective and explanatory enough for an uninformed reader to understand. It needs to foster honest, engaging discussions, and must be modular enough to avoid re-work in bringing together reports for consolidation.

Some easy to implement practices to consider include:

  1. Use infographics in the executive summary: It might sound radical, but professionally-rendered infographics can be powerful tools to deliver a high-line summary, as compared with lines of text. They also make for better contextualization and more freedom to change formats on a periodic basis.
  2. Standardize terms and major assumptions: All service towers and team members preparing reports across the levels of governance should adhere to similar naming conventions. While this appears to be a simple thing, it is surprising to see how often it fails to happen in real life scenarios!
  3. Apply the relevance thumb rule: Teams responsible for preparing these reports need to regularly assess the relevance of each element for the intended audience, particularly at given moments in time. For example, very detailed incident or missed SLA analyses may be needed for operational governance reports during the stabilization period, but post stabilization, the focus needs to change to other priority areas
  4. Explore interactive visualization tools like QlikView or Tableau: Organizations have started adopting use of real-time data visualization and reporting across platforms like desktops, mobiles, and tablets. This provides users with flexibility to view dynamic charts based on their preferences. Providers supporting services to mature organizations in which users are comfortable using such tools may want to explore using them to buoy their governance reporting capabilities.

Governance Reporting

Some of the most conservative companies have had to modernize the structure and layout of even their Annual Reports to keep them relevant and more aligned to changing communication needs. The global sourcing industry should take the cue and look to infuse some change into the very documents that form the basis of their ongoing relationship health assessment!

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Governance obligations are typically well covered in outsourcing contracts, and select governance documentation developed before the outset of the engagement. But even when both parties are committed to mutual success, conflicts can, and often do, arise between clients and providers.

To help ensure issues don’t raise their ugly heads, every outsourced relationship should develop, maintain, and bi-directionally enforce a governance playbook that is aligned to overall business goals. The playbook should include the governance framework, operating model, processes/procedures, contract, and documentation. A dedicated governance playbook repository for the outsourced relationship enables an overall view, inventory and access to all documentation related to governance processes, tools/templates, training for effective relationship management.

Critical components of the playbook include: 

  • A detailed outline of all key contractual obligations, such as reporting requirements, metrics, and documentation
    • Both the buyer and provider must clearly understand the contractual obligations and confirm a consistent understanding of their respective obligations
    • All the dashboards and reports in the world mean little if neither party understands the metrics being measured
    • To avoid misaligned expectations and continual delivery issues, ensure that both organizations have a clear understanding of the metrics and how each SLA will be captured, collected and monitored. SLAs are foundational to any services agreement.
  • Clear definition and alignment of problem resolution processes to business needs
    • Build governance processes that go beyond quality of services and contractual obligations
    • Focus on operationalizing joint governance to support accountability and oversight of the outsourced relationship, aligned to desired outcomes
    • Instate a process whereby unresolved issues are addressed at appropriate levels to preserve delivery continuity and prevent escalation of every item to the executive level for resolution.
  • Consider aligning metrics to documented processes
    • Develop process documents and metrics that matter most, and leverage the contract language, but also include concepts related to leadership objectives
    • Include these as part of the management review process to ensure alignment throughout the contract
    • Develop and maintain a joint Master Training Guide for all things governance to align expectations
  • Conduct training from the leadership level down to reinforce management commitment
  • Incorporate training to existing meeting agendas to complete training in real-time. 

What are the key components of your company’s governance playbook? 

For more insights on governance, please see the Proficiency and Partnership blogs in this three-part series.

Governance balances the competing interests and needs of the buyer, end users, and the service provider. The intent of governance is to build a strong relationship, and align strategies, goals, and objectives through collaboration, mutual respect, and continuous communication.

Governance models should be foundationally designed with a joint relationship management structure and processes to build a cooperative, trusting working environment that encourages both the buyer and provider to make collaborative, proactive, mutually beneficial decisions. This requires active leadership by senior management in both organizations, including hands-on sponsorship, ownership, coaching, mentoring, influencing, and intervening, when necessary.

A true win-win partnership, as enabled by effective governance, is one that motivates the provider to do satisfy not just the contract but also all parties, and deliver value beyond the metrics and the original contractual expectations.

Following are the key principles behind setting up a partnership type of relationship with a service provider.

Tiered management structure with peer-to-peer alignment

With a tiered management structure, effective communication, responsive and efficient decision-making, and resolution are supported across three distinct levels to ensure alignment between executives and delivery teams. This keeps the focus on day-to-day service delivery without either party losing sight of strategy goals. The three tiers and their associated responsibilities should be:

  • Executive Committee – enterprise view of outsourcing strategy and provider relationship
  • Management Committee – ensure outsourcing performance is meeting internal and external objectives
  • Operating Committee – manage performance reporting, provider-driven changes, escalated issues, and out-of-scope requests

To ensure objectives are met and the spirit of the partnership relationship is maintained, the people engaged at each level must view their role as working with the provider, rather than policing its activities.

Decision-making and authority rights must be clearly defined and understood by both parties at each level

Defined and documented decision rights will help organize decision-making and execution by setting clear roles and accountabilities, and by giving all those involved a sense of decision ownership. In addition, the executive, managerial, and operational levels must aligned across both parties. While this may seem obvious, governance models often break down due to misalignment of these levels.

Commitment and sponsorship at senior levels is critical

Sponsorship should be evidenced by the commitment of sufficient resources and management time to nurture the relationship at both the tactical and strategic levels. All communications, formal and informal, must make it clear that senior management views the outsourced relationship as a true partnership, and will work together to provide joint oversight to achieve the desired outcomes. Moreover, commitment and plans for strong change management, training, and communication need to be rolled out, reinforced, and managed. 

Governance is successful only when the both the buyer and provider are successful

Buyers must make significant investment in standing up and staffing the governance organization, and management must be aware of the potential impact of the joint governance on current policies, processes, budgets, skills, competencies, and relationships, etc.

To help ensure mutual success, a proactive feedback loop should be developed, and periodic reviews by buyer and service provider stakeholders with progress reported to senior management should be instilled. These regular reviews enable both parties to process feedback, make required changes to the governance model, and proactively manage expected deliverables throughout the contract. They can also present a strategic opportunity to improve buyer and provider organizational capabilities, operational resilience, and competitive analysis in the longer-term.

Has your company experienced misalignment among the executive, managerial, and operational levels? What did you do to rectify the situation?

For insights on two key guiding principles to consider when building your governance team, please read the Proficiency blog in this series.

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