by Beth Bacheldor

How To Get the Outsourcing Deal You Bargained For

May 11, 2010
IT Leadership

When crafting your outsourcing deal, make sure the sales and implementation end up on the same page.

A few months ago I wrote about British Sky Broadcasting’s legal win over EDS (now part of Hewlett-Packard), in which a London court ruled that EDS has to pay British Sky Broadcasting (BskyB) damages stemming from a lawsuit that alleged EDS of “deceit, negligent misrepresentation and breach of contract.” You can read about it here.

It was clear that the suit, and the ruling, was a stark reminder that providers need to deliver what they promise. But it is also serves as a vital lesson that organizations who seek and procure outsourcing services need to ensure they get what was promised. After all, BskyB may have won damages, but it had to muddle through a failed CRM system implementation and then go through a lengthy and likely expensive lawsuit. Who wants that?

Anyway, I had the chance to talk about this all with Anirban Dutta, a director at Computer Sciences Corp. (CSC). I figured Dutta would have some sage advice since he has spent much of his career working on outsourcing deals. If you recall, Dutta is the co-author of a new book, “Winning Strategies – Secrets to Clinching Multimillion-Dollar Deals,” which you can read about here. Dutta wrote the book, which looks closely at the winning strategies of those who’ve crafted and won high-value outsourcing deals, with Hetzel W. Folden, a VP at CSC.

Dutta listed several key tactics to ensure the outsourcing deal you sign for is the deal you get:

  • When the service provider responds to an RFP, or pitches your organization with an outsourcing deal, make sure you negotiate with and engage the right partner at the outsourcing company. That means sitting down with more than just the sales team. Dutta says to engage the executive typically known as the client partner, which is the executive that will oversee the deal once its underway, as well as oversee the account managers directly involved in the deal.
  • Ask the service provider to showcase its program management capabilities. And be sure to ask the provider to share more than its program management framework. You need to get specific: have meetings in which you “interview” the provider about the skill sets and leadership capabilities of the actual people who will be providing the services once the contract is signed. And make sure the service provider is upfront about the possibility that the project managers initially tasked with the work could be replaced with other project managers.

  • The engagement should outline what specific business problems the outsourcing deal is going to solve, and whether the deal includes application development or uses packaged solutions such as SAP’s ERP or something else—make sure you have conversations with the people who will be responsible for and will handle the specific business solutions to those problems (i.e. the outsourcing provider’s employee responsible for the SAP ERP application).

All of these tactics need to occur early in the sales cycle. For the most part, it is about communicating with the service provider upfront, and making sure you get all the information you need about who will run the outsourced services, and how they’ll run them, once the ink has dried on the contract.