Nine principles that are the cornerstone of successful outsourcing relationships

A constructive relationship between client and supplier is crucial for the delivery of the benefits of outsourcing - and such relationships do not happen automatically.

A constructive relationship between client and supplier is crucial for the delivery of the benefits of outsourcing - and such relationships do not happen automatically.

From my experience as an outsourcing consultant and my study of outsourcing projects I have identified nine principles that underpin successful working relationships. These apply to both the client and the supplier.

Trust needs to be earned

Work towards building trust in your organisation. Aim for an open and honest relationship built on mutual trust. Discuss this at an early stage, before the deal is concluded.

The supplier needs a track record of meeting contractual commitments and being open about problems. The client needs to demonstrate that it will pay invoices on time and deliver project inputs on schedule.

As confidence develops, both organisations will become more willing to share plans and develop a more strategic partnership.

Look for win/win solutions

Work towards a collaborative relationship driven by shared benefits. Naturally the client will look for cost-effective services and will want compensation when things go wrong. But adversarial relationships are not well suited to the complexity of IT outsourcing deals that have to adapt to changing requirements over several years. In every situation try to identify ways for both organisations to benefit.

Co-operation, not domination

In the initial stages the client will feel very much in control, defining requirements and choosing between suppliers. During negotiations the two sides may feel more like adversaries, protecting their own interests.

Once the contract is signed, the power should not shift towards the supplier. Try to establish a co-operative approach.

Foster good communications

Set up processes for sharing information at all levels. Be as open as possible about strategy and plans. Encourage everyone to share good news and bad. Do not just communicate when you have something to complain about.

Aim for mutual understanding

The client should help the supplier learn about the organisation: not just about the IT department, but also business objectives and plans, market positioning and competitive strengths.

The client should take an interest in the supplier's fortunes and how this deal fits into the wider picture. Look beyond the individuals you know to find out how the organisation works and where it hopes to develop.

Criticise - if you must - openly

When things go wrong, stand back and take an objective look. Is it entirely the supplier's fault?  Look at the issues from different perspectives. When you have identified problems, discuss them openly and honestly. Tackle problems immediately, do not let them fester and grow.

Know when to compromise

The client needs to strike a balance between ensuring proper control over the IT services provided by the supplier and knowing when to give a little. Both organisations need to feel that the deal is worthwhile. The client wants value for money but the supplier must be able to make a profit. Everyone will need to compromise from time to time.

Resolve personality conflicts

Individuals make relationships work. Sometimes key individuals find it difficult to work together. Personality clashes need to be recognised and resolved. Try to prevent confrontations and avoid a blame culture.

Foster realistic expectations

A combination of hard sell from suppliers and an enthusiastic in-house team can give business managers unrealistic expectations.

They may assume that higher-quality, cheaper services will be provided from day one. When this does not happen dissatisfaction begins to grow.

Everyone concerned needs an accurate picture of what should happen when. This in turn will form part of a communications programme.

Elizabeth Sparrow is the author of the BCS book, A Guide to Global Sourcing

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