Wednesday, August 11, 2010

How to Maximize Outsourcers - Part 3 of 3 - Working the Relationship

This is the 3rd part of a 3-part article on how to get the most out of your outsourcing relationships.  
Now for Part 3 - The Relationship.  Customer, Consumer or Partner 

Part 3 - Us

You've taken a big step in evaluating  the mission that your IT organization is on, and have decided that there are core services that you should be focusing on to make a business impact, and that there are services which are not core and that you will partner up to achieve the maximum outcome.  
Phew...  big step.
Next, you have carefully selected outsourcing options and providers that will deliver outcomes aligned with your corporate objectives and business focus.
Great job!... but you're not quite ready to achieve a return on this work.  There are still 2 major hurdles you need to get through in order to start actualizing benefits of this relationship and to start taking advantage of the benefits.

Hurdle 1) Frankenstein Complex
So you have just inked the deal, when you step back to look at your creation and say to yourself - "I now have more complexity, disjointed parts, awkwardness; I've created a Monster!". 
Well, before your peers start running into the data center with pitch forks and torches, you need to be armed and ready.

First, you must make sure that you have clear roles and responsibilities outlined and accepted by your team and the outsourcer.

Next, you must be clear on intellectual rights.  Who owns the IP, the code, and access to your data.  Depending on what you are outsourcing, this can be very complex.  The "Cloud Computing Bill of Rights" by James Urquhart can be a great start.

Finally, you need to show value.  
Ugh... not more presentations.
NOT MORE Presentations...  the last thing that your business peers want to see is a powerpoint of how you've glued body parts together.  (sorry for the graphic image, but that's how non-IT business units look at most of our presos)

I'm talking about real value, demonstrated by outcomes that matter.
So, now that Franky is keeping the lights on and handling daily operations, take this time to setup the following committees
(I recommend in this order):
A) End-User Improvement Steering Committee
 -- A joint effort between IT and departments with the largest or most critical end-user base, focused on improving the end-user experience. 

The output of this committee should be focused on areas of improvement in business operation.  Shy away from look and feel unless it is truly an improvement that will improve business performance.

B) Service Quality Improvement Steering Committee
--Bring together a representative from the top 3 to 5 services within the business 

Create a Service Quality initiative that is based on verifying value-add (yes the old VVA stuff for those with manufacturing backgrounds, hey it works) of the services that the company delivers.

The output, from an IT perspective, should be to start labeling and documenting the business services relationships to IT services and the IT Service providers.
-WAIT!  don't you mean IT assets?
No, I don't.  You need to trust your service providers, and trust that they will create that level of documentation.  Trying to micro-manage the outsourcer is a losing proposition.

With that said, let them do a lot of the work for you.  By providing them the service relationship model, you can have them provide the reporting to you in a format that the business wants to see, along with the reporting on their performance.

Now, you can start to change how IT is perceived.  Yet, beware... you’re still not there.

Hurdle 2) Extreme Makeover Complex
This new look for IT is very exciting to the business.  They really like some of the new-found attention that they are getting.  Yet, without maintaining certain disciplines, the glitter and glam will fade quite fast.  

Here are some personality checks to keep the relationship strong.  
Don't forget where you came from.  
In other words, don't forget the difficulty and complexity of the services you have outsourced.  This is not your chance to finally be the "Customer" and unleash all these years of pentup frustration from being beat down by the business.  Your outsourcer is your partner, a partner who will best serve by making you look like a hero.  

It's not cheating to multi-source.  
(I know this is sound more and more like a Cosmo article...)
But seriously, it's business.  Single-sourcing is not always your best option.  Be open and honest with your provider.  Dictate your requirements and reasons for sourcing alternatives.  If you feel that your current provider is over-stretched or over-committed - tell them.  It will give them the opportunity to focus on the services that they are delivering, plus it will create an opportunity for them to compete in the future.  
Of course, you may be surprised and find out that they are more mature in this offering than you think; that they can provide great credentials and references to back that up. , In this case, it's a WIN either way.  Remember from Part 2, this is a competitive marketplace, and you have every right to keep providers earning your business.

Finally, don't play games.  
Sad but true, there are many who feel that all the resources of an outsourcer are at their beck and call.  Be warned!  Outsourcers with whom you can play games, play games as well.  You are fooling yourself if you think you are getting more than you paid for or bargained for.  Enter the relationship with honesty and integrity and expect the same back.  View the outsource partner as an extension of your organization, while remembering that they are NOT your organization.  
So when dealing and interacting with them avoid internal politics and keep them focused on delivering for your team.

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