According to prominent business publications, inability to meet expectations is the leading cause of outsourcing failure. Find out how to avoid setting your processes up for failure.

Start Smart and Plan

Half of the “expectation equation” is developing a clear scope of work documented with identification of both project and process deliverables. In the fevered pitch to integrate technology, get tasks done and achieve fast savings results, the proper time is often not spent on planning. With such a huge disparity in the way companies and providers define the term “lease administration,” the risk of failure can be reduced significantly by having each party define that term. They must also consider what is included in order to achieve the end results.

The other half of meeting expectations is delivery. Making sure that there are specific measurements, good communication and a properly motivated service provider can greatly improve results and process integration. The time spent considering KPI’s and SLA’s is not just to complete a contract, it is in developing a good reporting process and dialogue.

Better Questions Yield Better Answers

With 20 years of lease administration experience, we’ve answered our fair share of RFXs. Many times, the questions seem to be disjointed and more tactical than strategic. Those of us that have been around this industry for a while feel like we can almost tell what went wrong at a company based on the way they’ve structured their RFI/RFP. Too often the questions force quantitative answers that fit into a grid but prevent better answers that can’t be put into a box. When it comes time to price everything, it introduces a confusing disparity that creates risk.

Sometimes, when a sourcing initiative gets delayed or a second round of questions and pricing is requested, it is because there has been a wide variety of answers and prices included with the responses. Without a clear explanation of your company’s desired end goals and the specific tasks and responsibilities you are looking to outsource, your RFP responses will most likely be filled with industry jargon and loss leader language and pricing. It gets further confused with embedded dashboards implying data you can’t even capture and processes that may not even fit your corporate culture.

Asking more solution driven questions will elicit more specific responses. Though creating these questions will require more initial work than a “fill-in-the-blank” RFP approach, asking them may be well worth the trouble. It should also ultimately save time and keep the sourcing timeframe on track by preventing the need to send out a second round of questions.

Your questions should allow the bidder to clearly answer:

  • How they define lease administration and what specific tasks they include
  • How the company will contribute, enable or support your company’s goals
  • How they will integrate their tools and deliverables into your workflow
  • Who the bidder is committing to the task and how you can contact them

“Free” Lease Administration? No Such Thing

Don’t be fooled by “free” lease administration. If you are doing it yourself by reviewing operating costs, you’re paying for it. If you’re handling it in your Accounts Payable department, you’re paying for it. Even if your broker is offering it to you for “free,” you’re still paying for it!

There are companies that only focus on this work and even some really good departments within the full-service companies, but it’s important that the people doing the work feel empowered to advocate for the client, not just babysit the portfolio until a transaction takes place. Focused groups typically provide better results than ones that are just an extension of a brokerage group or software company. In those cases, the incentives actually work against you even if they look focused. It can be hard to tell but unlocking the total value of lease administration weighs in the balance.