© 2012 LP Innovations, Inc. All rights Reserved

How should I determine if

outside loss prevention resources will benefit my

company?

Trusted Solutions | Proven Results

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Introduction

The Decision Process

The concept of outsourcing or co-sourcing (using outside resources) has been a widely accepted practice across various industries for the last several decades. What began as temporary services, primarily supporting administrative duties, has flourished into the world of technology (IT), human resources, finance and loss prevention. Whether utilized to provide additional support to an existing business function or support the entire business function, outsourcing has proven its success as a valid business model. When a company chooses to do business with an outside solution provider, the selection process is often based on two determining factors; the logical decision to outsource and the emotional decision to outsource. Both require different lines of questioning and research to determine whether outsourcing or the potential partner will be a good fit for your organization. The logical decision is the often the easiest to consider. This decision includes answering questions such as;

Does our business require the use of their services?

Will the solution improve our business process?

Does it make fiscal sense?

Will it help us achieve our goals? The emotional decision is often the point of consideration that takes more thought. This decision process needs to take into consideration the personal aspects of both those within your organization and the comfort level of the outsource solution provider you may select to become your partner. Getting

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through the emotional decision includes answering questions such as;

Are we comfortable allowing outsiders into our business process?

Will they work for our best interests or their own?

Will they be reliable and deliver results? The following whitepaper looks specifically at the emotional decision or the emotional “buy-in” to loss prevention outsourcing. We choose to use the word “buy-in” because let’s face it, those who will need to work regularly with the outsource partner will have to buy-in to the concept. A strong

partnership will only occur if everyone is onboard and is working toward the overall success and achievement of results. The word, buy-in brings forth personal acceptance, which is the emotional side of the decision process. For the purpose of this document, let’s assume that the decision to use outsourcing makes logical sense. Whether you are interested in using an outsource provider to manage your loss prevention function or support your existing function or department, you have concluded that specific services will help you to achieve your goals and the cost of the program fits into your planned

budget. You are logically ready to move forward. You must now look at the factors involving the emotional buy-in.

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The Factors of an Emotional Buy-In to Outside Resources

Delivery | Reliability | Creditability

Part of the decision process of choosing an outsource provider includes speaking with references. You speak to references to learn more about how current clients interact with their solution provider, how responsive the solution provider is to the client and of course to learn the results of their program. These references should provide you with a comfort level (to a certain extent) on the provider’s Delivery, Reliability and Credibility of their outsource solution. Let’s take these three factors and dig deep into what information helps those within an organization to become comfortable with the decision to outsource.

Delivery If an outsource solution provider cannot deliver on the expectations of their program elements and expected results then they will not be in business for long. On the surface it is a pretty simple concept – deliver your services according to how you present them in the sales process. When one speaks with a provider’s reference, the questions commonly pertain to how the provider set-ups, implements and execute their services. One may also inquire about the process of working with internal resources both at the corporate and location levels as well as those in management versus line staff. This line of questioning is important but it is still based primarily on coming to a logical decision to move forward, not the emotional decision to move forward.

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To support the emotional decision process, the line of questioning around delivery should focus on areas that include working within your company culture, understanding of business process and their ability to work as part of your team.

How well did they learn and understand your company culture and business processes?

Did they come in like “know-it-alls” or did they listen and learn your processes before implementing their solutions.

Does your outsource provider delivery their services as if they were part of your team?

Do you see consider them as an extension of your team and not as outsiders? Do your store personnel feel the same way?

To move forward emotionally with an outsource provider, one needs to be comfortable knowing that they will deliver a program that is built around your business model, speak your company language, support your corporate culture and most importantly delivery a program as part of your team, not perceived as outsiders to your team.

Reliability

When seeking out an outsource loss prevention provider, reliability or dependability is a must. Chosen services will include timetables, schedule coordination between multiple persons and deliverables; all which depend on the solution provider meeting deadlines and time commitments.

Emotional Buy-In Tip Look at an outsource or co-source solution

provider’s list of clients to better understand their

ability to integrate into a company’s

culture.

Are there unique cultures within their

client base?

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Additionally, certain services will include working side by side with location personnel, various levels of management, and being both a resource and a knowledge base for your team. One must know they will be there for your team, supporting your team’s goals, objectives and needs. One fact about working with an outsource provider is the knowledge that you are not their only client. You are paying for resources whose time will be split amongst other clients. And although the frequency of certain services are often spelled out in service level agreements, you need to know that your outsource provider will be there when you need them to be. Emotionally, that is what is important to you, and possibly how you will truly measure their reliability. The emotional “buy-in” to the reliability of an outsource service provider is from asking questions to the provider and their references about how they manage their clients, determine priorities and support their clients with regards to time management and resources.

Do they have a separation of duties, which allows for more efficiency in support of their client needs, or do they have personnel that wear “multiple hats” for multiple clients?

How do they determine resource ratios when it comes to supporting various clients?

Talk through the expectations of priorities and determine the “reasonableness” of these expectations.

Ask references what were their initial concerns when they were choosing to outsource. Did these concerns come to fruition? If so, how was it handled by the outsource provider?

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Taking into consideration the Law of Human Interaction, issues will always occur. Regardless if you utilize internal resources or an outsource provider, there will be times where something happens; scheduling conflict, miscommunication, etc. Knowing that inevitably issues will arise, you still need to have a comfort level knowing that your chosen partner handles conflict and issues efficiently and effectively. You want an outsource provider that has shown;

Established thought and process in being available and supportive to all of their clients.

A proven history of reliability and support to their clients.

A genuine commitment to serving your company and supporting all that is necessary in achieving your goals.

Creditability The last factor of the emotional “buy-in” is the factor of creditability. Through our years of experience in the outsource business, we have learned that creditability is often the deciding factor in choosing to outsource a business function. Realizing that the definitions of reliable, dependable and creditable are often interchangeable, when it comes to the decision to utilize outsource providers, the term creditability must include some terms within its definition. When we speak of creditability, we include the terms honesty, integrity and trusting in all that we do and what we represent. That representation is to our clients, our business partners and all to whom we service.

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For an outsource provider to be successful, they need to have a strong, solid reputation in supporting its client base. Yes, there may be individuals out in the industry that have a negative view of outsourcing or an issue with a specific company. Like a disgruntled shopper, their view may be accurate or it may be inaccurate, but it is their personal view of the situation. There is very little a company can do to change the viewpoints of some individuals. Creditability means having a track record of a positive reputation. It means having clients, other solution providers and industry contacts speaking the praise about what you do. This praise shows that you in fact do what you say you are going to do. It means doing right for the industry and the clients we serve. When it comes to deciding whether or not to choose outsourcing certain aspects of your business, you need to be comfortable knowing that an outsource provider will do right by you. This means that you need to determine that they will;

Work in your best interest, supporting your goals and initiatives.

Be a valuable resource to provide industry knowledge and trends, using their collective knowledge to support your company.

Be seen as an extension of you and your team. Not seen or acting as an outside consultant, but part of your team.

Build and maintain a trusting relationship, a true partnership, where everyone is in it together.

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The Emotional Conclusion

Emotion | Logic

The decision to outsource parts of a business function is as individual as those responsible for making the decision. Outsourcing has come a long way over the past couple of decades and with some business functions, like loss prevention services, it can still be considered young. For some, they have been utilizing these outsource solutions for more than a decade, for others they don’t know it even exists. When it comes to determining if outsourcing is logically right for your company, it is pretty simple. You review the services and they either fit or do not fit your needs. You look at the financial numbers determine if the numbers fit your budget. You then look at what you want to achieve and see if it appears that the expected results will make your company better. The logical choice is normally a black or white decision. The big question, however, is an emotional one. For many the question is - “Do we want to use someone that is not part of our company?” Our answer to this question is not a direct answer, but rather additional questions. Aren’t the emotional factors of selecting the right “person” the same when it comes to hiring a new employee as it is an outsource provider? Don’t the three factors of an emotional “buy-in” come into play when hiring a new employee?

The BIG Question

Do we want to use someone

that is not part of our team or

not an employee of our company?

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If you were interviewing an internal candidate for a position would you not want a candidate that;

Has shown that they have the knowledge and experience (and background) to deliver results?

Appears to be reliable and with a good understanding of time management, process development, handling conflicts, working with various people and taking action?

Represents themselves with strong confidence and creditability and it shows in their past experiences and references?

If the answers to these questions are positive during an interview with a job applicant most would consider them a good choice. Our point is that there should be very little difference in the selection process of an outsourced resource. So if you are in the process of determining whether or not to outsource your loss prevention initiatives, you need to determine both the logical and emotional sides of the selection process. But contrary to what many may believe, the emotional side should not be any different than that of reviewing a job applicant. The only difference between the two is found on the logical side of the decision process.

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About LP Innovations For more than a decade, LP Innovations, Inc. (LPI) has provided retailers across all verticals with loss prevention services and solutions. Retailers, with and without existing loss prevention functions and resources, have relied on LPI’s experience and expertise to bring forth proven strategies and methodologies to achieve their client’s goals. Our solutions provide our clients with additional resources that include experienced personnel and the collective knowledge base of our complete client list. To learn more visit our website or contact us for a discussion.

In addition to this whitepaper, LP Innovations provides various industry knowledge articles and research. You can learn more about the retail industry, loss prevention best practices and outsourcing at the following links. Weekly Loss Prevention Articles Best Practices Additional Whitepapers © Copyright 2012, LP Innovations, Inc. All rights reserved This paper was written, distributed and considered the property of LP Innovations, Inc. Contents of this paper cannot be republished, redistributed or modified in any way without the consent of LP Innovations. To request permission, please contact LP Innovations at solutions@lpinnovations.com or at 877-574-6682.