Will Lean Six Sigma Initiatives and Training Make Your People More Productive?
Process Optimization is big business these days. It seems that everyone is thinking about Six Sigma or Lean Initiatives, both in the commercial and public sectors. Lean Six Sigma Training is widely utilized as a way to get quick results. As a process optimization and operational enhancement program, Lean Six Sigma is designed to effectively improve organizational output. From increasing production to precise waste removal, this highly popular program has helped numerous companies achieve dramatic results. Whether it’s tackling costly delays or increasing efficiency, Lean Six Sigma ensures timely and productive results for all your employees and operational processes. In order to reap the benefits of this popular program, you need the services of Lean Six Sigma experts and Lean Trainers. The key to longevity and success is to develop an overarching program within which Lean Six Sigma Training and projects can be implemented.
Preparing for Outsourcing Proposal Oral Reviews
If you have put together a set of selection criteria for your outsourcing RFP, distribute and review these with all team members before they start reading. Team members can then read and make notes or indicate questions on each proposal. Your team can then complete an initial evaluation or scoring of the proposals.
When the team gets together to jointly discuss the proposal and collect questions, the initial evaluations can be discussed. However, remember that if there are questions about the proposal that must be answered, the answers and clarifications provided by the Service Provider can change the scores. Final scoring should only be done after the orals are complete, and any updates to proposals are reviewed.
Evaluating the Pricing of an Outsourcing Proposal
Some people are often surprised to learn that evaluation of the pricing of an outsourcing bid is complicated and not a strictly financial activity. Certainly the models can be run by the financial team, but the input to the normalization activity must be provided by the evaluation team.
The objective is to evaluate and compare apples to apples pricing, by building a solid business case for each bid. But before you can do this, you must normalize the price.
How to Read a Complex Strategic Sourcing Proposal
There are some recommendations here that will resonate with anyone who has ever had to read and evaluate complex proposals from multiple providers. These suggestions are derived from years of experiencing and leading these activities.
Here are some suggestions for making the task easier.
Beware the Words!
Confused by weasel words, slick marketing, vague responses? Understand that there is a secret language of outsourcing sales and proposals, known to insiders, but carefully hidden from the uninitiated. You must be aware of this language and read intelligently. This is the area that slips up most readers of proposals. Most unadvised readers will come away feeling good about what they read, when they should be feeling very suspicious and concerned.
Look for promises that appear to be too good to be true. Look for words like “we can provide…”, which indicate that they have the capability to provide a specified service, but have not necessarily included it in their bid at this point. Any description prefaced with words like “in the past we have..’ or “we will discuss with you ..” or “for client xyz we did…’ indicate that the service provider is demonstrating a capability -- but not a promise to deliver.
Service Providers hate to say no (until they have sealed the deal)
Service Providers don’t always make the answers to RFP requirements clear, especially a NO answer. Sometimes they hint at the real answer, but bury it so deep it is difficult to find. Why is this?
This, of course, is the essence of the game. Service providers are in sales mode when they respond to your RFP, so it is in their best interest to gloss over areas of weakness and emphasize strengths. Saying "no" to your requirements is a death knell in sales.
Your sourcing processes may drive them to say yes to everything, whether they mean it or not. It is often easier to tell you what you want to hear, rather than provide you with the best solution, disagree intelligently, or own up to the fact that they just “can’t/won’t” do what you have requested. The trick from their perspective is to get the sale and they will let the delivery team worry about those details later.
Negotiations, some say, happen when you least expect it. We say negotiation is not an event, but a process. The negotiations process start the moment you engage with the Service Provider candidates. Each step of the outsourcing process brings a subtle, yet important aspect of negotiation into play.
To understand this better, let's relate it to something we understand a bit better.
You walk into a dealership and say “I want to buy a car” [The Pre-Bid Announcement]. The salesman says “what kind of car are you looking for?” [The Pre-Bid Conference]. At this point, if you have done your homework, you are fully capable of describing your requirements precisely, “I need an all-terrain vehicle that gets 30 miles to the gallon, seats 6 adults comfortably and has room for a two dogs, and a ski rack”. [The RFP]. You may even be able to identify the make and model you are seeking – “I want a Jeep Grand Cherokee Overland, with GPS, Sun/Sound option and leather seats [The RFQ]. You will quickly be shown the most expensive Jeep Grand Cherokee on the lot, and you will start discussing price from there.
Some time ago, I listened to a client talk about a failed outsourcing project and describe the difficult situation they were in as a result. It seems that they had not defined their business needs and selection criteria carefully before determining which provider to negotiate with. Their selection was based upon personal relationships, past bad experiences, and marketing hype. They ended up trying to strike a deal with a provider that not only could not meet their needs, but who significantly raised the price during negotiations. They cancelled the transaction, which cost them hundreds of thousand of dollars in consulting and legal fees, and put themselves in a very precarious position operationally. I wish I could say that this situation is unusual, but unfortunately, I have seen it many times in my consulting career.
Building selection criteria before deciding who you want to invite to the outsourcing negotiations table is not rocket science. In fact, it is such a seemingly mundane task, that most people just skip it. The problem is that in a company where outsourcing is being considered, there are multiple forces at work -- people making decisions based on internal, unspoken criteria or old prejudices, or perhaps making recommendations that will scuttle the deal for personal reasons. So taking the time to identify your goals and business needs, and the objective criteria by which your team will make a decision, can help take the decision out of the realm of the emotional and into the realm of practical, business decisions.
Many people in outsourcing situations want to rush to the answer. Service Providers are anxious to know if they have won the deal, and the client is dying to know what the price will be. Plenty of other pressures encourage teams to rush through the early stages of the outsourcing transaction process. Sometimes, steps are skipped or compressed, sometimes decisions are deferred until “later” -- usually meaning “after the contract is signed”. This is certainly an easier and faster way to get through a transaction, and a tempting one. But like shortcutting the design and engineering of an automobile, you are likely to have lots of recalls, customer dissatisfaction, some accidents and bad press as a result.
Skimping on the initial processes of defining your objectives and requirements only pushes those activities out until the negotiations-- after you have received the pricing and eliminated the competition. When work that the internal team could have been done upfront is pushed into contract negotiations, expensive lawyers and consultants generally do a lot of the work. If you push the critical decisions and discussions until after the deal is signed, you are most likely looking at pricing increases, unmet service needs, and a serious disconnect between performance expectations and service delivery. Not doing an adequate job of understanding your strategy, and your current environment can set you up for buying the wrong set of services, too much or too little service, or choosing the wrong provider. And getting it wrong doesn't just result in headaches -- it can be a serious blow to the bottom line.
Here are a few things you should never omit when negotiating with a potential service provider:
My company recently bid on a project to assist a client recover from an unsuccessful technology implementation -- they had spent millions of dollars on a third party system, including the fees paid to the integrator, software licenses and hardware purchases. The system was supposed to result in better efficiencies, reduced time to deliver and the ability to handle a great workload.
After the implementation, however, little changed in the organization and its processes. The users in the departments changed their work patterns only minimally. Most of the work continued to be manual -- they just added a few steps to interface with the system as necessary. In essence, the company had spent millions of dollars and the results were far from satisfactory: workload for the users had become more difficult and the promised savings and efficiencies had not materialized. That isn't what they had in mind when they installed the new state of the art system, but somehow the end users, the integrator and the IT department that hired them neglected to go about the difficult business of change management. But this article is not about a failure to do effective change management. It is about getting to the heart of what you really need to consider when selecting a service provider to do a critical project.