How can you negotiate a BPO contract with clear and measurable deliverables?

1 Understand your needs and goals

Before you enter a BPO negotiation, you need to have a clear understanding of your own needs and goals. What are the functions that you want to outsource and why? What are the expected benefits and risks of outsourcing them? How will you measure the success of the BPO provider? How will you communicate and manage the relationship with them? These questions will help you define the scope, objectives, and criteria of the BPO contract, as well as identify your priorities and trade-offs.

2 Research the market and the provider

Another important step in preparing for a BPO negotiation is to research the market and the provider. You need to have a realistic view of the current and future trends, opportunities, and challenges in the BPO industry, as well as the strengths, weaknesses, and reputation of the provider. This will help you benchmark the costs, quality, and innovation of the BPO services, as well as assess the provider's capabilities, experience, and culture. You can use sources such as industry reports, customer reviews, case studies, and references to gather relevant information.

3 Define clear and measurable deliverables

One of the most critical aspects of a BPO contract is to define clear and measurable deliverables. Deliverables are the specific outcomes or results that the BPO provider agrees to deliver to you within a certain time frame and budget. They should be aligned with your business goals and expectations, as well as reflect the value and quality of the BPO services. To define clear and measurable deliverables, you need to use SMART criteria: Specific, Measurable, Achievable, Relevant, and Time-bound. For example, a deliverable for a BPO provider of customer service could be: "Increase customer satisfaction by 10% within six months by resolving at least 90% of inquiries within 24 hours".

4 Establish key performance indicators and service level agreements

Once you have defined the deliverables, you need to establish key performance indicators (KPIs) and service level agreements (SLAs) to monitor and evaluate the performance of the BPO provider. KPIs are quantifiable metrics that measure the progress and success of the deliverables, such as cost savings, productivity, quality, or customer satisfaction. SLAs are contractual clauses that specify the minimum standards and expectations of the BPO services, such as availability, reliability, responsiveness, or security. They also define the penalties or rewards for meeting or missing the SLAs. For example, an SLA for a BPO provider of IT could be: "Ensure 99.9% uptime of the IT systems and provide 24/7 technical support with a maximum response time of one hour".

5 Negotiate the terms and conditions

After you have established the deliverables, KPIs, and SLAs, you need to negotiate the terms and conditions of the BPO contract. These include the duration, price, payment, termination, dispute resolution, and confidentiality of the BPO partnership. You need to negotiate these terms and conditions in a way that balances your interests and the provider's interests, as well as creates value and trust for both parties. You can use negotiation tools and techniques such as BATNA (best alternative to a negotiated agreement), ZOPA (zone of possible agreement), and win-win strategies to achieve a fair and mutually beneficial BPO contract.

6 Review and finalize the contract

The final step in negotiating a BPO contract is to review and finalize the contract. You need to carefully read and understand the contract, as well as verify that it reflects all the agreed deliverables, KPIs, SLAs, and terms and conditions. You also need to check for any errors, inconsistencies, or ambiguities in the contract, as well as seek legal advice if necessary. Once you are satisfied with the contract, you need to sign it and exchange it with the provider, as well as communicate and document the contract to all the relevant stakeholders.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?