Successful FAO service providers assume a "partner approach" to prospective engagements, rather than strictly following a customer-vendor model, according to a study of successful FAO sales techniques. The study, by FAO Research and Vantage Partners, provides insights into the challenges and success factors of pre-contract outsourcing dealings, with an emphasis on what happens during the FAO sales cycle.

Outside of negotiations about price, capabilities, service delivery and contract terms, effective pre-contract relationship management is THE most important component of upfront trust building.

“People do business with people they like, especially in a service industry like outsourcing,” said Lisa Ross, CEO of FAO Research. “For customers to hand over mission-critical Finance functions, they must have the utmost confidence that there will be the 'right' cultural fit and interpersonal chemistry with prospective FAO suppliers. Outsourcers must take this notion very seriously if they want to win new business in an increasingly competitive supplier market."

Highlights from the research include:

• Successful FAO service providers assume a “partner approach” to prospective engagements, rather than strictly following a customer-vendor model.
• Winning FAO contracts based mostly on the tactic of offering the lowest price does not create enduring relationships.
• Successful relationship management must be based on truth about a supplier’s ability to provide the services promised.
• Experience in FAO engagements, as well as supplier representatives financial backgrounds, help provide security and a sense of well-being in the relationship.

“While relationship building is integral to any outsourcing relationship, it is even more critical in FAO," said Ned Madden, an analyst with FAO Research. “While the client may have had outsourcing relationships before in IT, for example, it is not unusual for the FAO engagement to be the first of its type and a journey into the unknown for the CFO. An upfront focus on relationship management is critical to forming effective pre-contract dealings.”

About this study

FAO Research's report, "The ‘Secret Sauce’ of Getting Short Listed: Best Practices in the FAO Sales Cycle", analyzes how successful buyer/supplier relationships develop before contracts are even signed. Conducted in collaboration with Vantage Partners, the report is based on interviews with eight global outsourcing service providers to determine the challenges and success factors of bidding on FAO engagements. These firms included: Accenture, EXL Service, Genpact, Hewlett-Packard, Infosys BPO, OPI, TCS, and WNS Global Services.

» Story on Analyst Firm Website

» Comments   Digg this    del.icio.us Tweet This