Best Practices for Effective Scope Management

Spend Matters would like to welcome a guest post from Vantage Partners. Click for Part 1, Part 2, Part 3, and Part 4 of this series on managing scope in offshoring relationships.

Treat scope management as a joint challenge
The first step in tackling scope management and its associated cultural challenges is to treat it as a joint challenge. A launch process at the start of the relationship is a perfect opportunity for both sides to develop a shared understanding of quality standards and scope boundaries. As part of the launch, customers and providers should implement a mechanism that enables them to effectively identify what is in and out of scope, recognize when those boundaries need to be changed, and make legitimate decisions that both sides can support.

Provide cultural awareness training to address cultural challenges that make scope management difficult
Customers and providers can use cultural awareness training to align around their approach for working together effectively throughout the relationship. To address scope management, the parties need to discuss and agree on an approach for addressing commitments, ambiguity, communication, and risk.

As part of the training, the parties should consider adopting "working together" protocols--including shared assumptions and undertakings--that describe the types of behaviors that will add the most value to the relationship. A communication protocol might describe the value of sharing information to alert the partner of scope-related concerns and a commitment to regularly communicating evolving business objectives that could impact scope. The parties should view the protocols as a dynamic resource that they will amend as necessary based on the changing interests and needs of their organizations.

Cultural training might also help the parties address tendencies to agree even when not sure they can deliver. Godfrey Pinto, previously Director of Offshore Outsourcing at a gaming software company, says the training at his previous organization included videotaped messages from the CEO and from the provider and instructions on how to recognize the difference between "Yes, I understand" and "Yes, I agree." In a program called SpeakUp, senior management encouraged provider staff to communicate openly and assured them that there were no penalties for saying "No." the company has also established a ListenUp program for its own organization to address the provider's claim that "We speak up, and you don't listen."

Equip governance and account teams with critical joint problem-solving skills
Skills training will not make scope issues go away, but managing the conversations more effectively will reduce the time wasted on conflict and improve outcomes for both parties. Many parties take a positional bargaining approach (see Figure 1) to conducting scope conversations, as though they are haggling over a Pashmina scarf at a bazaar. They start with an extreme opening position, try to avoid granting anything but the tiniest concessions, and make take-it-or-leave-it threats before either reaching a split-the-difference compromise or escalating to senior management. Positional bargaining is perfectly appropriate for haggling at a bazaar and when the stakes are low, issues are simple, the working relationship doesn't matter, and implementation is irrelevant. But in outsourcing relationships, the stakes are high, the issues are complex, the working relationship matters, and implementation is critical. A pattern of resolving scope issues though positional bargaining leads to suboptimal, arbitrary solutions and poor working relationships.

Figure 1: Positional bargaining approach

A different approach is needed to optimize value for both sides, create useful precedents, and maintain, and even build, the working relationship. A collaborative approach to negotiation, such as the one originally developed at the Harvard Negotiation Project (see Figure 2) can create value and better solutions for both sides.

Figure 2: Collaborative negotiation approach

Managing difficult scope conversations across cultures requires individuals to learn the following critical behaviors:

  • Seeking to understand the other party's interests and perceptions
  • Balancing advocacy and inquiry
  • Exploring data and interpretations that underlie conclusions
  • Developing creating solutions

A collaborative approach enables individuals to engage in these critical behaviors and overcome scope challenges so that both sides achieve the full value of their offshoring deals.

- Danny Ertel, Partner at Vantage Partners

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