In my last post, I described the steps involved in outsourcing your billing function from the point at which you get started through the point at which you sell the concept internally. This post focuses on the steps from the point of evaluating outsourced billing partners through the point at which you are up and running with a “live” implementation with your billing outsourcing solution provider.
Step 6 – Evaluate Outsourced Billing Providers. Establishing criteria for making a decision on which billing services provider to go with is the first step in the evaluation. Consider criteria such as the level of expertise of the provider; level of support for different billing scenarios required by your company; level of automation to support each scenario; amount of time in business; number of existing customers; financial viability; customer retention rate; and cost of services. Notice that I haven’t specified a “fit” with your requirements. The reason for this is that when choosing a provider, it is important to leverage the expertise of the provider, rather than specify detailed requirements for exactly what they must do. If you are too detailed and rigorous in your requirements, and make potential providers “jump through hoops” to meet them, then you might negate the benefits of highly efficient methods (processes and technology) they may already have in place. This is not to say that you shouldn’t have requirements, but you should approach this evaluation as if you were selecting a “best of breed” solution, as opposed to a “custom build”. You will need to identify candidates. This is perhaps the most difficult step. In my experience, focusing on those candidates that are specialists in the billing function, as opposed to those that have simply done a lot of outsourcing, is the way to go. Sending a Request for Information (i.e. “RFI”) to these candidates is the preferred approach; as opposed to a Request for Proposal (i.e. “RFP”) which is generally a more detailed document associated with providers needing to demonstrate that they can meet detailed requirements – not the desired approach as described above. Obtaining an actual proposal after you have had a chance to interact with candidate providers is the last part of this step. You should ask for a project plan addendum to the proposal so you know exactly what needs to be accomplished to get up and running from the standpoint of each provider.
Step 7 – Select a Billing Outsourcing Partner. Those providers who are the best fit against your criteria should make the short list of two or three. It is important to consider the fact that you probably don’t want this entire process to take too long, so those from the short list that look like they have an excellent handle on the specific steps to get through the process (and can do it quickly) should rise above the others in your evaluation. At this point you should ask to speak with references. Make a list of questions to ask the references that are oriented around aspects of what you want your relationship to be like when you are “up and running”. Example topic areas for questions include: Background Info (duration of existing contract; number of bills processed monthly; etc.); Reasons for choosing the provider; Level of overall satisfaction with the provider; What they like best about the provider; Difficulties they have had (if any) in working with the provider; Level of expertise demonstrated by the provider; Opinion of the technology used by the provider; Accessibility of Senior Management to address issues; etc. Conduct your reference calls, and be sure to ask if it’s okay if you contact the reference again in the future with follow-up questions.
Step 8 – Establish Metrics and a Service Level Agreement. The metrics by which the on-going operation will be assessed might have already been defined in the proposal and through earlier discussions. It is optimal, however, to revisit both metrics and the service level agreement (SLA) at this juncture, because at this point you will have an excellent handle on how you want things to work and an understanding of how your desired provider operates. Both parties can bring input to the subject of the metrics and process for governing the outsourced billing arrangement.
Step 9 – Plan and Execute the Transition. The project plan included with the provider’s proposal should provide guidelines on the tasks that need to be executed from their standpoint. A program plan for the transition should be created which will be “in sync” with their project plan, and which will also address other internal projects that you need to complete. Each “project” does not need to be a monumental effort, but should be managed tightly to ensure an effective transition. Your internal project(s) should address: changes to business processes as a result of the new arrangement (consider transactional processes, continuous improvement processes, and management & governance processes); internal systems and reporting changes required; and an organizational transition plan for those individual affected. Not all of these internal projects need to be fully completed prior to initiating the “production” operation with the billing outsourcing provider, but the activities and required timing should certainly be considered carefully and well-understood by all appropriate internal stakeholders.
Step 10 – Monitor the Process and Enjoy the Benefits! Monitoring the process and identifying and communicating the benefits internally is an important consideration not to be overlooked. The metrics and service level agreement defined in Step 8 and the internal management & governance processes identified in Step 9 will help with the structure of this step. An on-going communication program with all interested parties should be part of this final step as well. Communication with internal stakeholders, customers and with the outsourced billing vendor should be planned and executed carefully in order to ensure that all concerns are heard in a timely fashion, and that the benefits of outsourcing your billing will exceed expectations of all involved.
