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?