Embrace the BOM

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The NOA summit was once again a great success this year. Leading lights from the outsourcing industry came together to discuss the dos and don’ts of outsourcing and how to develop best practice solutions in outsourcing.

My personal highlight was the presentation of David Hawkins of Partnership Sourcing Limited (PSL) . He opined that the most important element in an outsourcing agreement is the relationship and I don’t think anyone could argue.

One to look out for is BOM! Not the exploding type (although this could cause an explosion in our industry) but Business Orientated Metrics. It can allow suppliers to deliver better services, allow for unforeseen change and needs less customer people to monitor it!

This came from NOA research into 2000 companies throughout Europe. That’s the good news, but the bad news is that less than 2% of organisations try to use it! Why? Because it’s difficult to work out business metrics. Perhaps the root cause of problems? This is something the NOA could champion in 2008…

There again one of the oft-championed basics of an outsourcing agreement is finding a supplier with a cultural alignment to ones own organisation. This goes without saying. What does need to be stated is the depths that this needs to be taken to.

A thorough self-assessment as well as an in-depth partner evaluation with pre-selected criteria are necessities when procuring a supplier. This depth of relationship analysis needs to last from the procurement stage all the way through the outsourcing arrangement. And probably needs to be carried out by an independent third party!

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