Top 10: Tips for Winning Outsourcing Contracts
Even though economies are gradually improving after years of recession, there is still a strong focus on driving costs out of organisations. Outsourcing continues to be a popular option for companies looking to gain the benefits of specialist knowledge and experience at a price that is not prohibitive.
The pace of technological development has opened up new, cheaper service delivery models that have completely changed the market and the competitive landscape for organisations pitching for business. Traditional metrics such as contract length, annual run rate, and deal size have all dramatically reduced.
To stand out, it is therefore critical to elevate the proposition into a value-based dialogue that demonstrates a true understanding of an end-client’s business.
With that in mind, here are our top ten tips on how to increase the chances of winning that outsourcing contract.
#10 Mind the gap
During the pitch process, it is important to show potential clients that you have a clear line of sight across all the moving parts of business. The outsourcing landscape for a typical organisation is becoming increasingly complex and it’s likely you’ll be part of a broader multi-supplier sourcing strategy.
If you can show potential clients how you will put mechanisms in place to stop anything falling though the gaps between the different suppliers servicing the organisation and provide relevant, real time insights into the work, it will put you ahead of the competition – and a step closer to winning that contract.
#9 Alignment to “win-themes”
As outsourcing services become more commoditised, it becomes ever more important to show why your offering is the one to choose. Each client will have three or four key objectives, or “win themes”.
Ask the right questions to uncover these themes and ensure your pitch is anchored around how your solution will deliver against them. Often they include themes around the impact on the end user, how to increase productivity, how to improve the user experience, and how lower costs will be achieved.
#8 Fit for purpose
You can only prove to the potential client that yours is the right organisation for the job if you have the right people, with the relevant industry experience, at the right price. Show industry knowledge and how you will deliver the solutions that address their business issues. Most importantly, stick to the brief and draw clear parallels between what they want and what you would provide.
If you’re bidding as an incumbent, it’s important to be able to prove the quality of the existing service and how you’ve delivered what you promised when first awarded the contract.
Big promises are made while pitching, but if this isn’t measured correctly and reported back often and accurately it is hard to prove what has been done or show the benefits delivered. Keeping the client in the loop and updated not only proves you know what you are doing, it also places you close to the business which is important when the contract comes up for renewal.
Innovation is no longer optional – businesses rely on service providers to proactively propose initiatives that will drive improved performance. Your pitch should articulate methodology that puts innovation at the heart of the service and how that will be measured and evidenced over time, including how you will monitor the impact of innovation on the business objectives as new initiatives are introduced.
Collaboration is fundamental to the success of an outsourcing contract in so many ways. While previously contracts were awarded and the supplier was left to get on with it, this is no longer effective. Show how you will build a true partnership with the client to really drive value.
Transformation is about more than simply tracking the performance of projects. It is about tracking the outcomes delivered as things change. Transformation is a committed investment to improving elements of an operation and it’s crucial to have a mechanism in place to evidence the benefits delivered. By showing during the pitch process how this will be achieved, it will become a lot more real for the client.
#3 Focus on outcomes that matter to the business
Business relevance is key. Don’t make the mistake of just talking about the technology or service level agreements (SLA), it is critical to show you understand what really matters to the business and what they are trying to achieve.
By focusing on the outcomes the business is trying to achieve - and showing how your service will assist - you are elevating the conversation from the operational to the strategic.
#2 Provide evidence you are in control
You need to prove that you understand the business and are in control of the process; that you understand the needs of both the client as well as their customers. Focus on demonstrating value to the most senior stakeholders and decision makers, first and foremost building confidence that you’re a ‘safe pair of hands’ and how you will evidence control of the service from day one.
#1 Differentiation beyond cost
Cost reduction remains a primary driver for outsourcing decisions, so whilst you can’t price yourself out of the game, it’s important to establish the value that sets you apart from the competition.
From our own research, we know customers are now placing greater emphasis elsewhere, for example on how your service will support the business in achieving key outcomes, and bringing innovation and best practice insight. To win, you need a compelling, value-based story around your differentiating plays.
Like what you see! Signup for our weekly newsletter