How to Get Multiple IT Outsourcing Providers to Play Nice
Why can't your IT service providers all just get along? Here are steps you can take throughout the multisourcing lifecycle to get everyone working together.
Fri, August 23, 2013
CIO — There's no doubt that multisourcing -- parceling out the IT services portfolio among a number of vendors--has its benefits: competitive pricing, increased flexibility and access to a deeper pool of talent, among others. But working with multiple providers creates multiple challenges, not the least of which is trying to get all of those competing vendors to play nice.
In fact, almost everything in the typical outsourcing transaction, transition and operation is conspiring against them getting along.
For one thing, they may be no incentive for the providers to work together. Multisourcing has entered the mainstream, but outsourcing contracts and negotiations haven't kept pace with the trend.
Collaboration Is Not in the Contract
"One major challenge is simply the way that outsourcing contracts are typically negotiated," says Lois Coatney, director with outsourcing consultancy Information Services Group (ISG). "At a basic level, providers are financially motivated to get the highest possible fee for the least amount of work. This leads them to focus on their particular scope of responsibility, and to be very diligent about specifically defining what they are and aren't responsible for."
Each provider is often focused on a specific tower of service -- infrastructure services for one, application support another -- and focus their negotiations on service levels on that domain.
"The touch points between towers are frequently neglected," says Coatney. "Providers, again, have little incentive to build bridges and take on additional responsibility for issues that aren't within their scope."
While the outsourcers may agree in theory to collaborate, contractual terms related to collaboration are either absent or toothless. "As a result, you often see individual providers conclude that it's in their best interest to protect their turf and to find ways to show that fixing whatever problem arises is the responsibility of another team," Coatney says. Not only does the client not get the benefits of collaboration, it also spends most of its time solving disputes and putting out fires.
Meanwhile those IT professionals best-equipped to manage any inter-operational issues have been outsourced to one provider team or another. "This means the client's retained organization isn't prepared to play the role of problem solver," says Coatney. "So while the intent is to leverage best-of-breed capabilities, the outcome is often a hodgepodge of discrete services that doesn't benefit the business."
Multisourcing Can Work: Here's How
Coatney offers some steps outsourcing customers can take at various phases of the mulitsourcing lifecycle to encourage their provider team to work together: