The rules of outsourcing: 'I don't want to have a dog and bark myself'

NEWS

What are the rules of a successful IT outsourcing partnership? They're more simple than you might imagine and, as with any long term relationship, trust is key.

Last month Groupe Aeroplan UK, which owns and manages the Nectar customer loyalty programme, extended an IT infrastructure outsourcing contract with Savvis - its supplier of eight years. Fiachra Woodman, IT director at Groupe Aeroplan UK, told silicon.com the contract has evolved over the years to the point where it has now been extended for a further two years.

Staying with Savvis was not about inertia or a lack of imagination, however, but rather a result of the strong relationship between the two, according to the IT chief. "We wouldn't just stay because it was comfortable," he told silicon.com. "It's a very conscious decision to stay, it's not because we couldn't be bothered to move."

So how can a company keep a relationship with its IT supplier in rude health?

How do you make an IT oursourcing partnership last? (Photo credit: apdk via Flickr.com under the following Creative Commons licence)

First up, choose carefully what it is you outsource and what you keep in-house, said Woodman - as getting this balance wrong could have serious implications for your business.

What it boils down to is knowing the business - inside and out. "It all revolves around understanding what the corporate strategy is, understanding what our marketing strategy is, what our go-to-market position is and then figuring out what the best use of IT resource is to support that," he explained. "And that's how we try and figure out what we keep in-house and what we outsource."

Next up is forging a strong partnership - and that means not only choosing your outsourcing supplier wisely but continuing to work hard at the relationship after the contact is signed to make sure the partnership remains strong, according to Woodman.

"What we try to do is to outsource to partners who we can forge a good alliance with, and having done so we work harder at nurturing that relationship… more so than we would any other one practically.

"Because, at the end of the day, it's two different companies with two different agendas and two different aspirations and so we work bloody hard at those relationships."

Outsourcers must make their customers confident that they can deliver on time and on budget: The "ability to execute projects, do what you say you're going to do when you say you're going to do it, and do specifically that" is the key to building trust, according to Woodman.

With that achieved, the partnership will flourish and might even be relative plain sailing, he said. Yet if outsourcers fail to be trustworthy and slip up on delivery the relationship will be a rocky one.

"If I have to manage my outsourcing partner to too low a level then I'm effectively in a situation where I'm having a dog and having to bark myself," explained Woodman. "I want to be able to trust them and that's what I tend to get from Savvis - I tend to get to the point where I can trust them to do a job for us without having to look over their shoulder the whole time."

The rules may sound simple but companies mustn't get too comfortable either - the balance of what to outsource and what to rely on an in-house IT team to do needs constant attention, as Woodman points out: "It's one that you have to keep looking at and making sure that you're getting right."