Successful transition management lays the foundation for a strong ongoing outsourcing relationship. Here’s how excellence in transition management can be secured.
The implementation of an outsourcing partnership requires a significant change in the customer’s business. Contracts often cover the company’s business units across a wide geographical area, and typically this implies diverse settings with different challenges, different regulations and legal requirements.
Outsourcing contracts have a scale and complexity that demands an effective change and transition management programme.
Change and Transition Management lay the foundation for your outsourcing relationship
Research shows that projects with “excellent” change and transition management in place were six times more likely to meet the outsourcing objectives than those with “poor” change and transition management. Even those using “good” change and transition management were five times more likely to meet them.
A supplier’s ability to implement the changes the customer requires is the most important thing. The path to unlocking the value the customer wants is achieved through best practice change management, delivered through a structured transition programme. A proven approach to transition will maximize the success rate while ensuring business continuity as well as delivering the needed transformations in people, process and systems.
A dedicated transition team is key for a successful transition
One key to excellence in transition is that the change is delivered by a dedicated transition team, made up of highly-specialised transition managers, available for a defined period to guide the operations teams through the transition to steady-state.
It is important to ensure that transition managers have a formal project management education like Prince2 (or other certification), as well as a track record in successful delivery.
For every country or region covered by the contract, the team needs to have transition managers based in that country and access to experts in the labor law and other regulations for that area.
Both the transition team and the operations team need to be involved early – during the sales process and contract negotiations.
The transition team leads the change handing over to the operations team that will run the ongoing contract as the “go live” date approaches. Our experience suggests that early involvement of the operations team is essential to ensure ownership of key decisions.
Every great transition starts with detailed scoping and analysis
Every great transition beings with a detailed scoping covering every aspect of the project – ideally, with some of this done during the outsourcing contract negotiation. Detailed and documented scoping of deliverables is needed to align transition planning with the expectations of key stakeholders.
Alongside this, the transition need to identify project risks and make plans for mitigation to ensure business continuity from day one.
A key part of the process involves mapping and analyzing the stakeholders that are going to be affected by the changes. Understanding the likely impact of the desired change on the people involved – working out the level of influence of all the different groups of stakeholders, their concerns and needs – is essential to a successful transition.
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A great transition is never stronger than its change management communications
Stakeholder analysis and mapping helps to define the key project messages relevant to each stakeholder group and can help identify the best channels to use to reach those groups.
Failure to communicate the vision and strategy across stakeholder groups reduces stakeholders’ understanding of – and commitment to – the project, which can often result in problems. Targeted change communications are needed to recognize and address each group’s views of the planned changes.
One approach is for communications to be informed by a change methodology that recognizes the individual’s change journey. One of these is Prosci’s ADKAR, which stands for Awareness (communicate the need for change) Desire (to engage and participate – address the what’s “in it” for the various stakeholders) Knowledge (about how to change) and Reinforcement (repeating key messages to ensure change sticks).
Transparency and governance is one of the key foundations
Transparency is one of the key foundations for establishing a successful and enduring partnership between customer and supplier. Governance and reporting structures are the main mechanisms for ensuring transparency during transition.
Our experience is that effective governance structures should be formalized and consist of three parts: a joint governance set up for the project; an internal customer project governance setup; and a supplier project governance setup. The joint set up should include a steering committee, a programme board, as well as geographical review boards and selected workstream boards as needed.
It is essential that all key stakeholders are involved in the governance and that appropriate experts have a direct connection, collaborating on delivering the objectives of each workstream in the project.
Transfer of staff, training and induction are critical transition elements
People transfer is a critical element of a transition programme – where handling the emotional aspects of the process are as important as meeting all legislative requirements.
For this reason, the outsourcing providers needs to demonstrate dedicated HR expertise with experience of large-scale people transfer.
Induction and training are the keys to successfully motivating people and improving the service experience for the customer. Training especially has a key role in successful change management and embedding new ways of working – as well as motivation and a sense of belonging.
The starting point for designing an induction and training plan is understanding the change, mapping the competence requirements for the new service against the current competencies available, and identifying the potential gaps.