Achieving sustainable value in an outsourcing strategic partnership is difficult for a company (and a vendor) of any size, with the odds of success equal to that of winning a coin toss\u2014a very expensive coin toss. It might seem that the problems diminish for midsize companies because they have fewer people and process issues. But for mid-market CIOs, setting up and managing a strategic partnership has its own challenges.Hal Fedora, director of IT and audit for the California Insurance Guarantee Association (CIGA), sought out a strategic partner to help him deal with the drastic fluctuations in his organization\u2019s IT needs. CIGA, created by the California legislature to bail out insolvent insurers, sees its business come in waves. And in recent years, the waves were growing bigger. So Fedora signed a five-year deal with Data Return to provide everything from infrastructure and disaster recovery services to applications support, retaining in-house only the IT services most closely tied to the business of resolving insurance claims.Finding the right partner was the most critical, and difficult, step for Fedora. The EDSs and IBMs of the outsourcing world have the most experience with strategic partnerships, but smaller clients may fear getting lost in the shuffle of Fortune 500 customers. \u201cWe looked at some of the big names and we looked at some of the smaller players,\u201d says Fedora. \u201cBut when it came down to it, we were a midtier company and we wanted a midtier vendor.\u201d The field was narrowed even further by Fedora\u2019s needs. \u201cWe wanted someone who could provide us overall IT services. There was no problem finding an outsourcer to provide IT infrastructure and disaster recovery support. But when you start talking about application support, they all backed off. They don\u2019t like to go into that area.\u201d But Data Return did. In some ways, Fedora\u2019s experience with his vendor offers him more flexibility and customization than a Fortune 500 client might get from one of the Big Six outsourcers. Because of CIGA\u2019s size, Data Return has gained an intimate understanding of CIGA\u2019s systems and processes. \u201cWhen you have a huge Fortune 500 client, it\u2019s very tough to get your arms around every application they\u2019re running,\u201d says Tom Radle, managing partner for Data Return. \u201cWith our mid-market customers, we can figure that out.\u201dBut Fedora can\u2019t command the dedicated resources a larger customer could. He has access to three Data Return employees full-time, and he shares another team of 12 with other Data Return customers.The relationship isn\u2019t perfect, says Fedora, but it works. He\u2019s been able to bring IT costs down, thanks to the variable capacity the outsourcer provides. \u201cWe run into some issues with [Data Return],\u201d admits Fedora, who takes great comfort in having the phone number of the vendor\u2019s president at the ready. \u201cBut they\u2019ve provided us with some other services we didn\u2019t even contemplate when we first signed the contract.\u201d For example, when CIGA encountered problems in the process of replacing its critical claims processing system, Data Return stepped in to provide some programming expertise as well as infrastructure support to help in the data conversion between the old and new application.