Tribble Trouble

A friend of mine used to call the consultants who were hired at her company tribblesa creature brought to life in the original Star Trek series. Tribbles were cute little furry pets that came on board the U.S.S. Enterprise, bringing comfort and calmat least initially. The problem was they multiplied exponentially (they were born pregnant, and the more they atewhich they did constantlythe more they reproduced) and overwhelmed the crew. Likewise, this friend was watching a multiplying number of consultants come on board offering comfort and support, all promising a solution only they could provide to the very problem they themselves uncovered. As each solution failed to solve anything, it created an opportunity for ensuing tribbles to implement their panacea to a now worsened set of circumstances with a similar lack of results. With money gushing out the door in fees, it came as no surprise the company eventually wound up in Chapter 11.

The trouble at that company, though, was not the tribbles. The guilty party was management, which was clueless as to what the problems really were and abdicated its responsibility. Those in charge didnt have any coherent goals or a notion about an appropriate remedy, nor did they implement metrics to monitor results. They didnt get their hands dirty. And this misstep certainly isnt a consultant issue; rather, it applies to any business-partnering arrangement, including outsourcing or vendors (see related articles on pages 14 and 18).

A recent META Group report provided a process to drive decision-making, vendor selection, and ongoing relationship management in outsourcing. It includes setting the right expectations identifying the enterprises short- and long-term business objectivesselecting outsourcing vendors that can meet the business objectivesnegotiating contracts with service levels that align with primary business objectivesmanaging the outsourcing vendor relationships with a strong dedicated team. Gartner took a look at the flip side about a year ago and cited six worst practices of outsourcing that limit success: short-term focus, poor communication, inadequate service levels, no benchmarks, failure to recognize risk, insufficient resources.

The point here isnt in the particulars so much as it is in the need for the active participation of the company working with the outsourcer, consultant, or vendor right from the start. While the companies you hire may be the experts in their niche, you must be the expert in your business, and your expertise has to control and direct theirs.

With the expected growth in outsourcing and continued business partnering of all kinds, insurers need to take the lesson of my friends company to heart. Working with any partner involves varying risks. As carriers shift their focus from using outside help to fulfill limited tactical IT needs toward meeting challenges on an enterprise or broader strategic level, those risks get riskier. Participating fully in the process assists in containing such risks, and companies that do so, will (to quote Star Treks Spock) live long and prosper.

Sharon S. Schwartzman
Editor-in-Chief