The Outsourcing Enterprise 2

Fifteen years worth of research into information technology and business process outsourcing has produced a basic body of knowledge about outsourcing. But the focus has now shifted to what makes one outsourcing deal more successful than another.

In trying to identify what makes for success in outsourcing, practitioners invariably highlight relationships - but there are few precise findings on how such successful relationships should be developed (1). Successful relationships dont just happen. In this paper we show that overall strategic business intention must determine the nature of the relationship and the contract. A detailed design is essential to build effective relationships throughout the life of the deal. This determines the key underlying drivers of behaviour, and whether power-based or trust-based relations emerge. Positive intervention by top management is vital to make the chemistry work. We also point to the criticality of establishing targets. Thus a relationship values charter sets a benchmark for behaviour, while regular health checks and contract card monitoring to assess the success of the relationship are crucial throughout.

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