Whenever I'm asked which are the key elements that underpin successful IT outsourcing engagements, I always think that the best comparison to make is with the foundations of a strong, enduring marriage. Think about it. Both require a great deal of patience, collaboration, communication and trust. Similarly, in both cases, the ability to find a partner with a shared set of values can be the secret of sustained success.
It stands to reason that the most effective IT outsourcing relationships are built on a foundation of commonality. It's one reason why the importance of having compatible values should not be underestimated. For this reason, a willingness on both sides to view the relationship as a 'partnership' and not simply a 'contract' is key. It's also clear that the engagement stands a much greater chance of achieving a positive outcome if each party is able to work together on a daily basis to create a 'win-win' culture that benefits them both.
For this reason, it's no longer enough for CIOs to identify partners based solely on their ability to meet criteria such as providing specific skills at the right cost. Instead, the road to achieving real value lies in finding a way to partner with organisations that understand the value of working as a true partnership. The right partner is one that will work collaboratively to help clients achieve their goals, even at the cost of short-term profit.
There's never been a more important time for outsourcing providers to go the extra mile and to get under the skin of their customers to identify the areas that they can deliver business value. Indeed, one of the principal reasons that traditional outsourcing engagements fail is that they are not flexible enough to allow the degree of collaboration that's required over a period of time.
Flexibility is an important, and sometimes underrated element of modern business, and one that is necessitated by the fact that business needs have changed considerably in recent years. It's also a key consideration for any business looking to embrace new, innovative technologies such as cloud computing, which can impact heavily on contracts which are not designed to take such trends into account. Too frequently, service providers are guilty of sticking rigidly to SLAs, with little or no room for flexibility. In most instances, this can cause strain, and can even test the trust between clients and suppliers, leading them to create a 'them and us' situation that undermines the relationship.
Increasingly, businesses are beginning to understand that transparency, trust and empathy can be integral to the successful implementation of any outsourcing project. For this reason, service providers and users alike must be flexible enough when drawing up contracts to allow this to happen. The benefits of doing so are significant. It not only enables service providers to engage with their customers more effectively, but also allows them to proactively offer adoption of some of the future technologies that may prove to be a game changer for their customer's business.
An outsourcing engagement based on a foundation of compatibility in business values can help in both the short and the long term. The way the economic wind has blown in recent years means that more businesses than ever are finding it necessary to readdress their priorities and focus on different areas in business like digital. The process of realigning outsourcing partners to fit in with this new strategy can be far more difficult if you are tied into rigid and inflexible contracts. Becoming rigidly tied to an exit clause in your contract can also mean that you are tied to a specific business direction, without the flexibility to change until the contract expires.
When contracts are designed to be more flexible, this is less of an issue. Service providers are then able to more closely mirror the evolving needs of their customers and their business. In changing times, this is becoming an increasingly important consideration for any organisation looking to embark on a new IT project, adopt cloud-based utility services or reshape from a 'bricks and mortar' model to an online business.
Viewing an IT outsourcing engagement as a marriage is a good starting point for those looking to make it a success. It will prompt end users to find common ground with their suppliers. This approach will empower them to view it as a long-term commitment that needs continual work and attention. The truth of the matter is that IT outsourcing engagements should not, like marriage, be something that is embarked upon lightly. Done successfully, it can help businesses to successfully achieve their business goals as well as efficiencies in both costs and processes. However, if it's not approached with the right level of dedication, commitment, and understanding, there's a very real danger that it could result in nothing more than a costly divorce!