Relationship Versus Vendor Management

A recipe for successful outsourcing

Success in business relies as much on relationship management as anything, and when it comes to outsourcing this axiom certainly holds. The best outsourced team in the world cannot deliver excellence if projects are "thrown over the wall" with little communication or understanding between the parties.

You would think those of us in the IT world would know this by now. After all, managing outsourced relationships has been a topic of articles, blogs and conversation since the nineties. Relationships are clearly NOT easy, which explains why everyone from Dear Abby to this artcile keeps talking about how to handle them.

"People naturally develop and work through relationships," Rob Duff, COO of Coherent Solutions, suggests. "But organizations seem to lose that ability. Between planning, flow charts, deadlines, etc., we forget that every project comes down to the people involved. And people are, well — human. They need to be engaged and involved in their work. They need to feel like a vital part of the team and solution."

Bruce A. Stewart, management advisor and former columnist for Computerworld, wrote that: "Most companies put little time or effort into these (outsourced) relationships . . ." Yet outsourcing continues to grow, and, Stewart says, "Learning how to deal with the changes outsourcing brings can actually work in our favor." Stewart's article, reprinted on CIO.com, goes on to identify ways to optimize outsourcing relationships.

At Coherent Solutions we have developed our own recipe for outsourcing success that closely parallels Stewart's suggestions, and goes a bit further by incorporating accountability as well.

Tips for Successful Outsourcing

1. Formalize the outsourcing relationship. Create an organizational chart that shows who reports to whom within the scope of the relationship, and how teams and people relate to each other. Use Skype or other methods to meet regularly, share ideas and celebrate successes. Develop contacts deep into each organization so that cultural understanding is not isolated to just a few people.
2. Commit to the relationship. Stewart rightly points out that commitment can only come with trust, but he also notes that, ". . . a failure to commit shows up as a lack of success—on both sides of the table." He suggests that companies determine upfront that they are committed to establishing trust, and work from there. What you want, ultimately, is an outsourced team that understands company objectives and can contribute initiative and knowledge.
3. Insist on accountability — on both sides of the relationship. When given ownership of a project, people take responsibility for it. And with responsibility comes accountability. High-performing teams set guidelines and deadlines, and hold their members accountable to these. When practiced this way, accountability becomes an integral and positive part of team culture – not something that has to be constantly enforced from the top.
4. Focus on the long-term. There will always be short-term obstacles and set-backs. A good outsourcing relationship can survive these when internal and external team members are committed to the same long-term goals and expectations. As long as these continue to evolve together, the outsourcing team remains valuable, bringing its own history and knowledge that contribute to the bottom line.

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