Create Peer Pressure to Get Multiple Outsourcers to Work Well Together

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    Last week, I wrote about the uptick in multisourcing—outsourcing various facets of a large-scale IT project to multiple service providers—and the importance of building collaboration metrics into those contracts during the negotiation phase. That might have been the easy part. Ensuring that those suppliers work harmoniously together during the execution phase is the real trick.

    I had discussed this topic with Lois Coatney, a director at Information Services Group, a Stamford, Conn.-based technology services consulting firm. In addition to providing insightful contracting tips, she offered some helpful advice on how to manage the collaboration during the implementation phase. For starters, Coatney recommends inviting the providers to a workshop to go over key processes and interaction points so they’re able to come to some agreement among themselves as to how they’re going to work together. I asked her how receptive suppliers tend to be to that idea, and she said in her experience, they’re fairly open to it:

    They don’t want to be surprised. They would like to be able to engage in this discussion, and they want to influence it, and rightly so. If you’ve got three of four key suppliers, the ones who are going to be most actively involved in day-to-day operations, they want to be there at the table to influence it so it’s most closely attuned to how they typically operate. They don’t want to have to make a lot of changes, because changes mean expense. So if they can be part of that dialogue upfront, and influence how you’re going to operate, it’s better for them—it saves money for them. Secondarily, especially if you can hit it upfront with rules in their contract, and they can put their delivery team and their processes around those rules and those standards, they have an operating model that makes change less likely. So they prefer to be involved so they can deliver to that model. … There aren’t too many environments out there that are not multi-supplier, so the more experience they have, especially with the big clients who have been in a multisource environment, they’re very much more willing to participate, and to play a lead role in making that happen.

    Coatney advocates fostering a culture of positive peer pressure, where no provider wants to be identified as the one hurting the team, so I asked her what advice she has to help the customer foster such a culture. She said it begins with getting all the key suppliers around the table:

    The governance process that we’ve seen in place, where you have all the suppliers around the table on a continual basis, reviewing performance, when you pull up the metrics as to what your uptime has been across your major applications, or any issues that you have in the environment, and all the suppliers see it, they want to be the supplier that stands out as the easiest and best to work with. They don’t want to turn red. They’d rather have everybody else turn red; not that they want to embarrass everybody else. That sort of environment, where they’re all around the table, and they’re all talking through the issues, if there’s an issue being discussed and you haven’t been directly involved in it, you’re learning what’s going on, and you’re preparing yourself to be geared up and ready the next time something like that happens and you might be in the hot seat.

    Coatney recommends creating an operational governance forum, or cross-provider governance team, to oversee the collaboration between providers. I asked her who should be on that team, and she said a multi-level approach is best:

    At a lower level, we like to see basic incident managers from each company, who are dealing with incidents on a daily basis, get together and talk about the key things that are happening in the environment. They build relationships, they pick up the phone and call each other, they kind of start to formulate a team environment. When you get to the middle-operating, monthly level, we like to see the service delivery managers from each of the supplier teams, as well as from the client, who have accountability for the operation of that business. They’re there to solve problems, to look at trends, and see where they need to improve. They’re the ones who are really talking about what actions for improvement need to be taken within the environment. Then you get up to the senior level, which would have the senior account executives from each supplier, or they might even bring in some of their regional leaders, to get together in a room on a quarterly basis. That’s when the client can talk about what’s happening in their business, what competitive pressures they have, what problems they need to solve, so the folks in that room can start to take ownership and know what they need to do to help the client move forward. That’s more of a collaboration on strategy.

    I asked Coatney about the challenges that arise when one or more of the suppliers is offshore, and how she recommends fostering collaboration in that scenario. She said the offshore component is a fact of life:

    It seems like any supplier today, a lot of their delivery is done offshore. What we find is important is [that] you need some face time with key representatives from those suppliers, who can sit across the table and do the sorts of things that we’ve been talking about from a governance perspective. So even if you have a predominantly offshore provider, we like to see some onsite presence that you can build that relationship with, so the suppliers will pick up the phone and work together. That’s the key, especially early on in the relationship, where you are doing what we call process integration workshops. The people who are there, giving their insights and agreeing to how they’re going to operate, you really need an onsite presence for that.

    Finally, I asked Coatney about the impact on collaboration between different providers when one or more providers in the mix rely heavily on H-1B visa holders whose language and cultural backgrounds create a communication issue. Her response:

    My experience is you still typically have someone onsite who can be the predominant person working both with the client and with the other suppliers. They’ll have that communication, and then they can turn around and spend the next four or five hours working with their direct teams to resolve things. So you need to have some key folks in key positions who you can look to in order to have that communication.

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