subject: Managing The Relationship With Your It Services Company [print this page] In order to create a powerful outsourcing partnership, business leaders must be able to trust the IT services company providing the services. The establishment of governance, or management, is one of the most important factors that affect the relationship between the provider and the recipient. This sounds easy but is in reality, very hard to achieve.
As you work to establish your management process with your IT services company, align on the principles behind specific goals. As with compliance, the best governance structures are built on principles and guidelines instead of rules.
We believe that managing a relationship with your IT services company should not just be focused on the quality of specific services, or the contract terms and conditions. It should prevent value erosion, and the preservation of the end user experience. So, as you work to establish and maintain cultural alignment, don't build a structure that motivates your outsourcer to merely satisfy the contract as opposed to satisfying the customer and delivering value beyond the statistics.
That said, effective measurements are critical. But keep in mind that these programs need to exist to support the primary motivation for outsourcing, which in almost all cases will be to support the company's business model and overall corporate goals.
Following are a number of mechanical and tactical aspects that you should consider wrapping within your governance process, and some questions you should be asking in each area:
Customer care model - Be sure to clearly articulate your expectations when it comes to customer care. How often will there be communication? How many customer managers will be assigned to your account? What kind of reporting structure will be in place? How flexible is the IT services company in terms of adapting their structure and processes to your needs?
Service Level Agreements (SLAs) - The foundation of your services package will be the SLA. It should define the process, service levels, checks and balances, and reporting mechanism for your IT outsourcing agreement. Ask how your SLA will be monitored, and if you have independent access to a dashboard or other monitoring system. Typical SLAs consist of various availability or performance metrics. Also, consider the inclusion of softer SLA components such as number of end user complaints, effective escalation adherence, etc.
Quality of Service reporting (QoS) - What kinds of standards will your agreement be measured against? Are you able to define your own metrics for QoS, or are they all established by the IT services company? What time frames are involved in the reporting process, and what kinds of problem resolution structures are in place?
Adherence to IT best practices - Ask your prospective provider if they adhere to IT best practices. If so, what's the authoritative source for these practices? All too often, IT services companies will claim they follow best practices when what they actually follow are the best practices they've been able to develop internally. An example of an authoritative source of best practices is the IT Infrastructure Library (ITIL), a globally recognized series of documents that are used to aid the implementation of a best practices framework for IT Service Management.
Problem resolution - Has your prospective IT services company developed clearly defined issue identification, escalation, resolution and communication processes? Is the extent of your desired involvement in the problem resolution process understood and clearly documented?
In our experience, an exemplary problem management process (and the customer's trust in the process) is a key driver allowing IT management to focus on "strategic" priorities. These processes should go beyond what's normally included as part of your SLA, and are a key component of building and maintaining a harmonious relationship for the long-term. The IT services company's approach to problem resolution must align with your business needs.
Cultural compatibility - Beyond understanding the nature of your business, your IT services company must understand and be compatible with your corporate culture, regardless of the size of your company. The mechanics of governance are only as good as the cultural compatibility between the customer and the provider.
Resilience of communication - Another aspect of ensuring continued alignment is a multi-level communications framework. A successful communication structure is best served by multiple interaction points at varying levels of seniority between the customer and the provider.
Face-to-face meetings - As in any good relationship, there's no substitute for frequent, face-to-face meetings. If the IT services company isn't geographically close, work out a schedule in advance for meetings and protect those dates. Video conferencing and collaborative online meetings can also go a long way toward fostering open, honest communications.
Senior leadership involvement - On both sides of the partnership the involvement of strong, senior leadership is paramount to a successful governance program. It's only through this involvement that the needs of the business can align with the service delivery program. Both parties must communicate on a strategic, not cost-center basis.
Application functionalal knowledge - Your IT services company must possess a fundamental knowledge of your primary business processes that are supported by the enterprise systems your business uses, such as enterprise resource planning (ERP). Unquestionably, you'll want to partner with an outsourcing firm that has a solid understanding of the functional aspects of these complex systems, and recognizes the strategic importance they hold for your business as well.
Advocacy - Does your IT services company have a separate management structure for customer advocacy in addition to internal operational execution? One person wearing many hats may sound good for economies of scale and price-performance, but it will cost you intimacy with your provider.
Flexibility - A provider needs to be able to react to the changing needs of customers. While most vendors are very flexible with regard to expansion of services, few are equally flexible when it comes to accommodating change or reduction of services. This is a key factor to the longevity of a relationship.
The cardinal sin of outsourcing is one of focusing entirely on the mechanics and the price. By doing that you'll be missing the true potential of the relationship. So spend the time and effort required to ensure an effective management process, but don't lose sight of the fact that without cultural alignment with your IT services company, you'll only be creating ground rules for debate, not agreement.
