Emergence of a new culture

I am not sure when the transition happened but sometime in the recent decade the term partner replaced the vendor or provider. I think people went back to basics in the early part of the millennium driven by the slowdown, started focusing on leveraging existing ones and building new relationships. Business was tough to come and choices plenty which is where people made the difference. This subtle transition eased into our way of working and no one objected to the new reality.

Today we have partners providing total outsourcing, specialized domain specific or business process outsourcing, desk side support, apart from the various categories listed above. Many of these who have put in their heart and blood into delivering products/ services, irrespective of the contract or commercial arrangement, are truly partners to a CIO and the enterprise; my respects to them. We also have partners providing toner cartridges, USB sticks, printing paper where price is typically the determinant factor!

An opportunity wasted

Recently a CIO friend narrated a story where she met a new vendor where the discussion started with the intent that we would like to be your partners in success and not keep it transactional. The CEO and the team downward demonstrated high passion and commitment at the discussion table. They got engaged in a few projects as a precursor to what could be bigger things and achieve the status of a trusted partner. With many vying for the same business, it was seen as a prestigious win.

The slip between intent and execution has many horror stories spread across the industry. Senior teams from vendors attempt to build relationships with the CIOs, the sales team works with the domain specialists and the next level, and the delivery team which typically has no connect with the process starts discussions with the project managers and the users of the proposed solutions. And that is what transpired here too; one project was delivered well enough, the other killed the relationship.

What appeared to be a dream run became a moon race with surprises all through the journey! The initial effort estimates did not fit the project reality; either the team who did the initial study did not understand the complexity and expectations or her inputs were ignored in the proposal. So there was an attempt to restrict scope to fit the resources allotted. That upset everyone involved; the CEO made a visit, so did others involved in the initial discussion. Much water had flowed and a dam was essential.

Restoring some sanity to the project with the vendor CEO approving the additional investment and some hit on the CIO’s side too, the project looked like being back on track; but that was a false positive. The lack of trust made success elusive; the potential partnership gained adversarial tones with each pinning the blame on the other. It took some effort to bring everyone to a common understanding and move ahead.

What do you say, partner?

Partnership is built over a period of time and is a function of delivering to promise consistently across the layers. It takes effort to sustain it and requires investments and transparency from everyone. Everyone hates escalations which result due to lack of communication and assumptions. In my experience I have found partnerships that have stood the travails of time when there is no gap in expectations on both sides. Sales transactions do not build partnership, they only address tactical need.

Top trends
There were some clear messages:

• The global economy will continue to remain under pressure for the next couple of years
• Outsourcing deals will be smaller and of shorter duration as IT budgets will see a lot more rigor in the discussion
• Talent shortage will squeeze growth for IT companies and Cloud computing will keep the hardware industry challenged.
• The CIO-role will change again with technology evolution–the difference between the good and the challenged CIO will widen.

A vested interest?

They outlined the differences on how CIOs across geographies and industries outsourced core and non-core activities to focus on what matters, i.e. you guessed it right, the business. But then they also mention in the same breath that CIOs that did not outsource remained challenged to align the IT objectives to business. Whether it is remote infrastructure management (RIM), or application maintenance, and everything in between, the message was clear, outsource or perish, get relegated to reporting to the CFO.

Huh? Now that is simplistically stretching a facet of the CIOs role to create a perception that outsourcing can be equated with strategic intent. If you don’t outsource, then you and your team is busy with things that do not matter to the business and thus you are likely to remain alienated. Was there a vested interest in the words from these CEOs who have been struggling to grow their business? Some had taken over from ousted CEOs with a clear mandate to bring back the old days of high growth.

Time to introspect!

While I am a proponent of outsourcing and have partnered with IT service companies big and small to give away the technical or operational activities, in my experience there have also been cases of outsourcing not delivering to promise. CIOs connected with the pulse of the business draw the line on what needs to be given away and what should be retained. The company’s focus, perceptions of core, and finally the financial health determine what operating model should be adopted by the CIO.

The CEOs went on to talk about CIOs need to engage their stakeholders on what matters. People in a glasshouse do not throw stones at others. My plea to the same CEOs is to introspect a bit before preaching to their customers, the CIOs. The sales heads of the same companies want to engage with the CIO on nitty-gritties of technology that even the next level in the IT department rarely gets involved in (OMG, I saw a data center). They do not practice what they preach. A few CIOs I met the next day agree!

So what separates the good from the challenged? I do not for a moment believe that it is as simple as outsourcing operations or infrastructure or total outsourcing; a good CIO is a well-rounded leader who manages people and perceptions while ensuring that the delivery of promise is consistent with quality that is visible. S/he communicates effectively in all situations and is able to challenge business and IT partners/vendors in a discussion on the right solutions to business problems enabled by technology.

Is this the finite list? No again, there is no checklist that determines the difference; you have to find your balance.

Over a year of courting, discussions, negotiations and going over a long legal contract, it was a sigh of relief for the vendor and the enterprise when they did sign off the deal. As all strategic sourcing deals go, there was an expectation of maintaining business as usual with improved efficiency and lower cost; then move on to transformation driven by tools and technology which was the investment promised by the vendor. Over the decade of relationship, it was expected that there would be efficiency of scale, savings on the table, and investments in innovation with global benchmarking.

The big team arrived soon enough to transition services and fit or change existing processes into their framework, which they managed with some difficulty. Within a few months, unable to scale up to diverse needs across locations, changes in the management team were enforced and that brought welcome improvements though not commensurate to expectations. The first big review meeting was a shocker for everyone. Some milestones achieved, lot of work in progress way past due dates, a few endpoints seemed a long way off; the CIO who was well known for his patient handling of crisis lost his cool.

Opacity in contracts
To begin with, the interpretations of clauses done by the execution team were in conflict to understanding while drafting them into the contract. Stretched timelines became super-stretched timelines; senior consultants attempted to provide solace with no Plan B in case success eluded the team. The ‘high tension’ meeting resulted in change of pace and ‘compromise’ in favor of the customer. With new timelines cast, the pressure was on everyone; avoidable pressure as agreed by everyone present.

Why does delivery rarely match presales promises or timelines? Are sales teams preconditioned to sell unreasonable timelines or commitments to bag orders from unsuspecting and gullible customers? No, I am not calling the CIO names, but admiring the ability of the sales teams to sometimes get away with untenable contracts. I am also bewildered at the ability of delivery teams to squarely make a hash of even normal service delivery expectations. What causes history to repeat itself in almost every engagement?

A communication issue?
In this case, the CIO summed the case up with one phrase: “lack of consistent communication across the ecosystem”. The presales team did not spend adequate time taking the transition team through each and every clause and expectation. The delivery team found significant differences on the ground to their assumptions which required change. The project lead busy fighting fire every day forgot that consistent communication is essential to setting expectation, managing perception and finally success.

I believe that it does not always matter what you do; what matters is how you communicate what you have done or planning to do. No news is not good news when everyone is expecting some change. Otherwise strategic sourcing will become a big tactical pain where real life experience defines success.