Is your service provider a real technology partner?

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IS YOUR SERVICE PROVIDER A REAL TECHNOLOGY PARTNERIn order to create a partnership there has to be frank discussions between the partners and these discussions will not be without risk. Both sides have to be able to enunciate the benefits of the partnership for both sides. Planning up-front to select providers whose business model and culture facilitates effective partnership, versus finding yourself limited when trying to convert. Leverage existing experience and larger operations to save on costs and limit risk of quality issues, but understand your real needs. Mutual benefit beyond the current transaction(s) is required before a partnership can exist. There’s no partnership where all the benefits accrue to one party. A partner is much more than a strategic vendor as there is no long term benefit to the vendor in this relationship.

Convert the buyer-supplier relation into a real technology partnership: Partnerships are very hard, almost as hard as marriages, and they depend upon the same life blood; honest and direct communication. Partnerships have a similar life-cycle to marriages and dissolve for very similar reasons so just because you are communicating doesn’t mean the partnership will endure. Sometimes, the other party decides to go in a direction you just don’t understand. Each partnership has a unique set of circumstances and it is the way in which these circumstances evolve and are managed that is important. Work with potential partners on a few projects and then see if a partnership is a logical extension of that effort. In order to have any success in converting the more typical buyer-supplier relationship into a real technology partnership, it is critical to ensure that immediate and downstream expectations are communicated and understood between the parties. It will be important to communicate these expectations from members within the organization that are outside of the more day-to-day processes. Members of the business as well as executive sponsors should communicate a consistent message to their respective counterparts within the supplier’s organization.

Current trends that vendors are adopting to facilitate buyers in reducing outsourcing risks: The recognition that outsourcing requires as much management effort as doing the work in-house. There are no short cuts. If your company runs on informal communications such as hallway meetings (and whose doesn’t) then you must be prepared to put in the same management effort as if that team reported directly to you. Just because they are experts and you are not, doesn’t mean they understand your strategy, your needs, or your priorities better than you do. If you outsourced the work because you have more important things to do with your resources then it’s very likely they are a partner to begin with. Partnerships are not created by sitting across the table from each other.

While not new to mankind, companies are looking to build fewer, deeper and longer term outsourcing relationships versus coordinating larger numbers of “vendors” that are often competitors. As others mentioned, the trend includes focusing on quality to avoid saving on service while losing customers and reputation.

Buyer side inputs. Contributor requested to remain anonymous. We welcome services buyers and advisors to write for us.

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