10 IT Outsourcing Tips to Become a 'Very Important Customer'
Follow these simple steps to show your IT outsourcing provider a little love and get more attention than other customers in return (without giving away too much).
Tue, July 03, 2012
CIO — While you may not want to be your outsourcing provider's favorite client (that probably means you're making them the most money with the least effort), you don't want to be on their black list either. The very important customer roster is where you want to be.
"Being at the top of your provider's priority list will inevitably inure to your benefit over the long haul," says Steve Martin, partner with outsourcing consultancy Pace Harmon. "And figuring out how to get there without having to buy your way into this elite club is worthwhile."
There are some simple, but often overlooked ways, to show your outsourcing provider a little love and get more attention in return--without giving away too much.
1. Be Reasonable in Negotiations. You set the tone for the outsourcing engagement long before the contract is signed. "This is a long-term relationship. There's no need to fight for every point in the negotiation," says Shawn Helms, partner in the outsourcing and technology transactions practice of law firm K&L Gates. "Taking a hard line approach or asking for unreasonable, out-of-market terms creates ill will from day 1."
2. Open Up. There's nothing like a post-nuptial revelation to ruin a good relationship. A coveted customer will provide full disclosure of its environment during the due-diligence period, says Pace Harmon's Martin, including an accurate asset inventory, current performance levels, and number of resources supporting operations.
"A subtle, but important, ingredient in the buyer-provider love fest is a buyer that has a solid handle on their process baseline and a definitive total cost of ownership model prior to engaging the provider," says Michael Engel, partner with outsourcing consultancy Sylvan Advisory. "Being able to provide a comprehensive view of value being delivered to your client, based on their data, is an absolute love potion for the provider."
3. Put the Contract Away. Avoid hyper-technical interpretations of the agreement. Valued outsourcing customers "live the spirit of the [outsourcing] agreement and not just the words," says Edward Hansen, partner and co-chair of the global sourcing practice at Baker & McKenzie.
"If you conducted your contracting process in an optimal fashion, you should have a contract that embodies a great working relationship that you forged as you were working through the problems that arise during negotiations," Hansen says. "Bringing this problem-solving attitude into the way you manage your vendor after contract signing is a great and fair way to keep the relationship on track."
4. Offer Rewards. "Providers will show you the love if you show them the money--or at least the potential to earn it," says Martin of Pace Harmon. "Reward strong vendor performance and service with opportunities to pick up additional revenue and make clear the linkages between their financial prospects and their performance