Five Steps to Keeping your Business

Offshore teams delivered a significant portion of the products and services for the companies I worked for. My experience in utilizing offshore whether it is measured in years, number of projects or dollars sent offshore is rather substantial. You would think that by now I should have settled on a couple partners who I use on the majority of my engagements the way most VPEs settle on DB platform, app server, language, etc. Actually that is not the case due to many reasons, the main being different needs call for different partners. There is however another reason worth serious discussion – many vendors lose their clients mainly by not doing good enough of a job of keeping them. Whether you look from the vendor’s or buyer’s side that’s a shame…

escher_ascendingIt’s a common knowledge that in the service industries the cost of a dollar earned from a new customer is substantially higher than from an existing relationship. Yet for some reason that rule is ignored with unexplainable consistency. In particular I see it common with some of my offshore vendors. All too often a relationship with an offshore vendor goes through typical stages of a bad marriage: courting, expensive wedding, honeymoon, initial struggles, mundane irritation, aggravated frustration, and bitter divorce.

It takes two to tango, and being unbiased marriage counselor I should offer my connubial advice to both sides – buyers and sellers. I will, with this post focused on the vendor’s side:

  • Communication is critical element of any engagement and in particular distributed. Even two people who know each other exceptionally well and live under one roof are known to have communication problems, it’s no surprise offshore engagement fall apart due to communication problems. Communication problems have a cumulative nature, meaning that small issues accumulate and result in large scale problems. There is much to be said (and I will do that) about improving communications in offshoring engagements, for now just one critical aspect: You should establish and follow communication process. You should treat communication process as you would treat a manufacturing process. In particular consider no missed steps or other changes to the process unless you expect substantial improvement in efficiency AND the changes are agreed upon by all stakeholders.
  • Even the largest and the most conservative organizations are always in motion and all aspects of the engagement constantly change. Subtle changes aggregate and result in substantial shifts and turns. That affects all dimensions of the relationship – technology, staffing, roles, politics, etc. “It is not strongest that survive, nor the most intelligent, but the most responsive to change.” [Charles Darwin] If you want to keep the customer you need to learn to dance with your client following their changes and changing / reinventing yourself as the customer and the relationships change over time. Build your organization, team and the engagement structure in a way it can respond to change in efficient and timely manner.
  • In offshoring engagement too many things can go wrong; as a matter of fact something always goes wrong. It could be a minor issue, a widening communication gap, or individual associate behavior. It could also be a change in the customer’s organization structure, budget reshuffle, or a competitor getting a shoe in the door. There is no day that passes by without some event relevant to the business. In that light keeping a hand on a pulse of the relationship is vital for the engagement. That translates to well known fact that dedicated account management is a must for offshoring engagements. And yet, for some reasons, many offshore vendors think that the account management is “nice to have” activity, that it could be done on ad hoc basis, or that it could be combined with other roles, sometimes putting the person in a conflict of interest. This is a topic worth serious discussion, for now let me just say that insufficient investment in account management is likely to cost substantially more than the investment itself.
  • Any service provider has to deal with conflicting objectives that come from the very essence of any business – drive to reduce the cost and increase the revenue. To some degree it could be position as two forces that push quality in opposite directions. Maintaining the balance between this forces is exceptionally complex task and ability to do it right is the single differentiating factor that raises the winners above crowd of mediocre providers. This topic, even if limited to just my knowledge, would require very extensive and multidimensional coverage. There is an extremely important point though – measuring quality. You may want to increase or drop the quality depending on resources, clients, etc. But to do that you need a scale, a marker that points you to where the quality is. You can not control something unless you measure it. Trying to maintain quality balance without it is like trying to play pooling rope in a pitch dark room.
  • Your customer (organization) is represented by a few individuals that play different roles in the organization and in particular in the relationship with your company / engagement. These roles could include sponsors, champions, business buyers, gate keepers, etc. These people are critical for you success and absolutely essential to keeping the client. Each of them has their organizational goals and personal goals. For example specific project success could be an organizational goal, getting promoted as the result of the project success is personal objective. Your goal as the vendor is to recognize and cater to both of these objectives. As a matter of fact a flawless execution on organizational objectives but failure to meet personal ones can result in a loss of business.

Here you go. Just take these five steps and you will never lose your business… Not… Alas, these are required steps, not sufficient. As a matter of fact steps towards keeping the business have been illustrated by Escher the best (the picture above).

Hey, nobody said the life’s fair.

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4 thoughts on “Five Steps to Keeping your Business

  1. Very thoughtful and useful , thanks

    In these market conditions some exceptions do happen
    – Like the company you are working with might be in deep financial trouble
    OR
    – A competitor of yours might take over that company
    whats your take on such situations

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