The Importance Of Governance And Outsourcing It Services

To ensure that IT outsourcing services companies - who operate with a tremendous

amount of responsibility in our new age of compliance and oversight - are indeed working to further the interests of their partners and not just themselves, companies often create a framework within which the outsourcing partner must perform. It's within the bounds of this outsourcing governance framework that many relationships will either succeed or fail.

Since the 1980s, there's been a great deal of discussion and posturing on both sides of the customer-outsourcer fence regarding the structure of outsourcing IT services governance. However, we've learned that all the rules in the world won't ensure the successful deployment and management of an outsourced relationship. Clearly, the need for effectively defined mechanics and service levels is important, but all those checks and balances are only as good as the cultural alignment of the two partners.

We have developed a fairly simple definition of cultural alignment through our years of providing outsourced information technology services to mid-market businesses. We believe that the recipients of outsourcing IT services should be able to trust the motivations of the provider of those services. This sounds easy but is in reality, very hard to achieve.

Although it's often misunderstood, outsourcing IT services is not a new concept. The first supply and demand relationship was effectively the outsourcing of a specific set of functions. When you purchase a packet of frozen peas at the grocery store, you have effectively outsourced the growing, harvesting, packaging and delivery of those vegetables. It's just another case of demand aggregation equating to improved price-performance, predictability and quality of service. Or at least that's what it should be.

Many have read the historical and projected statistics for failed outsourcing IT services relationships, as well as the myriad of cited reasons. The bottom line is that IT outsourcing is a maturing industry that requires vendors and customers to recognize the fluid relationship dynamics required to drive a successful partnership.

The skills needed to manage an outsourcing IT services vendor are most likely different from the skills required to run your current IT department. Obviously, the more complex your needs, the harder it is to ensure price-performance, predictability and quality of service on the part of the outsourcer. That's the primary reason for ensuring cultural alignment and a clear process of governance.

We believe that governance in and of itself will not align IT to the business. Strong business leadership at the head of the governance mechanism is key. You can view it in the same context of IT's role within business. The governance process - like IT - is a power tool to be wielded by a competent business leader.

by: Chuck Vermillion

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