Outsourcing is now a 30 year-old industry, and by and large, the industry hasn’t learned to form sustainable relationships. Of course, there are a number of great, long-term sustainable agreements out there, but you rarely hear about them. The marriage analogy is overused when it comes to outsourcing, but nonetheless true. How many of us would enter a marriage with the expectation that it will ultimately dissolve? Outsourcers and their clients have learned over the years to distrust each other’s motives, and not surprisingly their behaviors have become a self-fulfilling prophecy: “I believe you are out to get me, so I will get you first.”

The good news is that sustainable relationships are not only possible, but they are out there. Alsbridge builds them all the time. In fact, we approach each engagement with a simple definition of success: to leave behind a sustainable, mutually beneficial, fair relationship between our clients and the provider we help them select. It takes just a little extra effort, but a lot of attitude adjustment.

It takes some counter-intuitive behavior, too. If you are a buyer, you may find yourself in the awkward position of advocating the provider inside your organization. A client once said to me, “Esteban, I feel like I am inside sales for the providers!,” to which I responded, “Sir, that means you are doing your job. For the provider, it might mean getting comfortable with a level of transparency you are not accustomed to. It can work. When I was on the provider side, a client once forced me to disclose, at an unusually detailed level, my costs and rates. I figured I was headed straight into the lowest-margin deal in the history of outsourcing. Imagine my surprise when they came back wanting to pay me 10 percent above market, in exchange for the assignment of my “A” team. This was a smart buyer—they became known as the account everybody wanted to be on, had no problems getting the A team and were lavished with attention, flexibility, and helpful “extras” as a result of their contribution to profitability. Though I am no longer with that company, that relationship endures today and I am not surprised.

If you are truly interested in building a strong, durable relationship, you must go beyond lip service. Don’t tell the other party you will be a better partner—show them you will be a better partner. It only takes a couple of incidents of successful conflict resolution to convince them you mean it when you say you want it to last. Investing in governance, communicating candidly and withholding judgment, being transparent about business goals and objectives, getting the retained organization right, those all contribute to sustainability. Trust me, any investment up front in these areas will be richly rewarded well beyond the cost savings reflected in the business case.

Esteban Herrera
Director
Alsbridge, Inc.