I recently heard some criticism of the UK Government’s ‘black-box’ approach to outsourcing within its Welfare-to-Work programme; where outsourced service providers are paid by results, ie for moving people out of unemployment. Whilst no doubt some political points were being made, the claim was that the lack of scrutiny of how the outsourced service providers were performing their work resulted in unemployed people being pressured into self-employment, even when their enterprise was doomed to failure. Short term results or outcomes are achieved, but the underlying problem is not addressed.

This got me thinking about the supposed choice in outsourcing for either a black-box or a white-box approach, where a white-box approach is usually defined as being focused on the process being performed, how many FTEs are involved etc (typical in BPO). While, black-box is focused only on the outcomes without regard to how the service is provided (typical in ITO). I believe this to be a false choice.

Increasing focus on the outcomes of outsourcing relationships is to be welcomed as understanding the required results is key to a successful partnership that meets the needs of the client-side organisation. Black-box thinking does good in encouraging thinking about required outcomes and results, but ignoring how the outcomes are achieved does not serve us well.

The attractive outcome of a price that is too good to be true will often prove to be the case. The low price might be achieved, but often at the expense of service quality. The contracted targets and service measures may be met, but is the practical execution of the outsourced service and the experience of service users consistent with the broader values and goals of your organisation, or could it be damaging your brand?

Yes, of course we should focus on the outcomes of outsourcing partnerships, and we should expect the service provider to bring their expertise and manage their operations and service delivery without undue interference, but please, also examine the solution they offer and provide – how it is done is just as important as what is achieved.

Do you shine a light into your outsourcing box?