NAB on Outsourcing, with Michelle Redfern

As Head of the Supplier Relationship Management program for National Australia Bank (NAB), Michelle Redfern is one of Australia’s foremost experts in outsourcing, offshoring and supplier management. She leads a high-performance, highly engaged team which thrives on diversity, in a complex and sensitive environment. Matchboard interviewed Michelle about her learnings and advice for other companies going offshore.

From a relationship management perspective, what is your advice to other companies who are offshoring their back office or contact centre?

Be really clear about the “why” before you outsource and/or offshore. There are obviously multiple drivers for outsourcing, however many organisations may not adequately think through what they are seeking as the primary and secondary benefits. Sounds overly simple, however my experience as business owner outsourcing, a vendor supplying and now in procurement managing large relationships tells me that this is the major reason why things can (and do) go pear shaped. Both the client and the supplier need to be clear about what success looks like, how to measure that success and to genuinely invest in strategic as well as operational alignment and engagement between the two organisations.

What are some of the learnings NAB has realised on its outsourcing journey?

I can only speak from my recent experience heading up the SRM transformation program. The journey that my team & I have been on to establish an SRM practice and capability at NAB tells us that we need to get serious about the value of a robust, enterprise wide supplier management strategy. We have designed and delivered a blueprint for sensible uniformity across our broad landscape of suppliers which ensures, amongst other things, that NAB has the right people with the skills, capability and capacity to govern the supplier relationship as well as the tools, templates and support. Our research shows that a great SRM practice will deliver agile, innovative, productive and high performing outsourcing arrangements. We know that without an agreed SRM philosophy, organisations are foregoing huge amounts of value and incurring cost.

How do you address the cultural differences between your Australian team and offshore vendors?

This is a huge opportunity area. Our globalised supplier environment means that people in organisations like ours have to be acutely aware of the different styles, approaches and methods in our vendor organisations. We have some thought leaders and champions in our business who are systematically working through the what and how of cross-border, cross-company relationships. We have some way to go in order to get it right, but with global dimensions we know it’s a long journey. With that in mind, we continue to seek assistance from trusted business advisors in the area of cultural diversity to understand how we can systematically ensure that NAB is a customer of choice.

What are the biggest barriers to success when transitioning offshore?

Time, Cost and Quality. Often all three of these factors are in play and in my opinion, you cannot have all three, at once! Being realistic, allowing for good, deep analysis of the existing business processes (before outsourcing!) diagnosing the pain points that outsourcing will solve and having a clear plan with roles & responsibilities defined is key. Ensuring that the transition teams on both sides of the relationship are set up for success, including having all the commercial and financial nuts and bolts sorted in advance, are a pretty good recipe for success. Nirvana right?!