The importance of Culture, Transparency & “Fit” when choosing an outsourcing partner.

I recently read an article on Linked In that reminded me of something that I have for a long time have felt is somewhat overlooked by potential partners in RFI/RFP/Bid Defense situations and that is the importance of culture, transparency & “fit” in these processes.

When I co-founded Arriello in 2008, we were a company of a couple of people and so we were not exposed to large opportunities to present ourselves and who we were as a company.?Indeed, we picked up small pieces of work and that was based on a level of personal trust that had been built up with individuals.?However, as we have grown over the last number of years to a double-digit ($), 140 strong company, the types of opportunity and people that we have encountered has changed quite radically.?

In some regards, this is a nice place to be in.?We get the opportunity in a relatively structured way to explain to a prospective buyer, usually procurement-driven with VPs of their relevant departments, why Arriello is of the right size, with the right technical resource and the right infrastructure, processes, and Quality Assurance to at least relevant to be bidding for a particular piece of work.

That process from RFI to RFP and hopefully Bid Defense is something that takes time, effort, and a lot of careful planning to get right and I think we do a pretty good job of getting a “seat at the table”.?

However, something that I see far too often is that so much focus is given to the important factors above and yet very little is also given to the “soft” issues that perhaps seem less important but can be the difference between a great relationship, a “working relationship” or a potential failure of the partnership.?Indeed, when we are contacted by a company that wants to change its service provider for say Pharmacovigilance, it is common that issues of poor communication, personality clashes, or a reactive company mentality cause a relationship to breakdown, not necessarily technical proficiency.?However, those factors can lead to a client having to do more than they expected (why outsource if you have to take on more??). ?They for me, are examples of poor cultural and organizational “fit” and yet they are only found out after the work is awarded.

Typically in an outsourcing scenario, two factors are immediately given as the go-to responses when you ask what are the key deciding factors of whom to choose (assuming technical proficiency is a given, as it should be):

“Price and Quality”.?

Not surprisingly, that often means that price needs to be really competitive against others and Quality needs to be the highest.?Of course, being competitively priced is very important and high quality should be a given, not an option in my opinion.?Nonetheless, it still surprises me that cultural alignment and fit are not so commonly mentioned.?Perhaps it is the case that this is so obvious as not to be raised or perhaps, more likely, it is not given the level of consideration it perhaps warrants because of course anyone bidding to win a project should be smiley, pleasant and telling you, as the buyer, that they are the best possible option for your business!

This leads to another point that is related and that is about transparency (which is also related to pricing)!?We are perhaps sometimes “too honest” when it comes to pricing and capability.?However, it is for good reason.?As I mentioned, we have been relatively successful in winning some very interesting projects, but they have not always been because we have offered the best price or had everything the client needs.?On the contrary, we have sometimes had to explain to a prospective client that we will need some time to set up some new activities that are either not core or extend what we already do.

I firmly believe this is the best approach and wins more often than it loses and anyway it is the way that I believe we should operate.?Nonetheless, we have seen situations where promises made in a competitive bid by others could not be borne out and I wonder from that experience how much the client then puts this down to bad luck or whether there is a deeper analysis of culture, approach transparency alignment.?

I say this in good faith.?I would rather we lose an opportunity that is either too big or too far away from core business than try to shoehorn a project into a format that does not fit with us being able to give the best delivery after.???

And that brings me back to where I started. I would urge anyone who seeks to go to market from strategic outsourcing to truly weigh culture, transparency, and fit as key factors in your decision-making process.?

And that's not just if the Business Development person gives a good "performance", but do the technical and project people on that bid seem to you like people you would want to work with if they were sat in your office??

Would you employ them yourself??

If so, are they the kind of people that you could imagine having a conversation with and that person taking positive actions??

These are all soft questions but with hard answers.?Cultural fit is not either about different nationalities.?

We employ over 20 nationalities in Arriello, but we take great importance on having a customer-centric mentality when we recruit, and this is part of our delivery ethos.?It is also completely understandable and expected that a good level of the client’s mother tongue is not only spoken but that there is a cultural understanding there also.?So, for example, if we are working with a UK or US or Swiss company, do we also “get” them??Not just their language, but the client’s national culture, approach, and expectations as well??

It may sound daft at first.?It isn’t.?

In the end, outsourcing is a bit like a marriage.?You can get married in Vegas in an hour, but it doesn’t mean the partners will have good long-term prospects (or maybe they will if they get lucky!).?However, luck is not a strategy!

So I would urge any prospective buyer when it comes to crunch time of choosing perhaps between two very similar bids to ask yourselves not only how technically capable they are, not just how good their systems are, not only if their pricing fits with your budget but also do these guys “fit” and if things get tough at any point, are these the people I know I can talk to get stuff done!