Outsourcing Resolutions Vendors Should Make in 2011

CIO - Way back in December 2010, CIO.com presented eleven resolutions for the IT services customer striving to set their outsourcing relationships right in the new year.

But it takes two to tangle up a perfectly good deal. So as we kick off 2011, we offer these additional outsourcing resolutions for the party on the other side of table-the IT service provider.

Resolution #1: I will get help my partner get into shape. Outsourcers were all over opportunities to cut their own costs in 2010. Now it's time they'e shared what they've learned. "Find ways to shed excess costs and bring these forward to your client," says Adam Strichman, founder of outsourcing consultancy Sanda Partners. Don't just sell your customer a new service that promises save them money someday; uncovers ways to shed costs now. "This should not be something which was requested by your client, but something you know needs to be done," Strichman says. Once finished, surprise your client with an unexpected price reduction.

"Providers have very smart people that know the client's business and these people have good ideas for reducing cost," says Mark Ruckman, an independent sourcing consultant that works with Sanda Partners. "Rarely do these ideas make it to the client, because they don't provide increased value or margin for the providers." Forego that little bit of profit for the greater good. The savings don't have to be huge to have a significant positive impact on your relationship.

Resolution #2: I will seek-and offer-clarity. There's not a CIO in the world who isn't trying to figure out where, when, why and how to implement cloud-based services this year. Yet most outsourcing providers remain reluctant to clarify their own vision of "the cloud." "Tier 1 outsourcing providers need to demystify-or better yet, come clean-on their cloud offerings by providing tangible economic and performance data to their customers," says Steve Martin, partner in outsourcing consultancy Pace Harmon. Start with some apples-to-apples comparisons of your legacy IT outsourcing offerings and the equivalent cloud-based service.

"Legacy service providers must resolve to co-opt cloud computing before it co-opts them," says Stan Lepeak, managing director of global research for outsourcing consultancy EquaTerra. Collaborate with key industry players to continue to develop standards for security and interoperability, advises Eric Simonson, managing partner with outsourcing consultancy Everest.

Resolution #3: I will say what I mean. This suggestion rings as true for outsourcing suppliers as it did for outsourcing customers. There's nothing more powerful than exactitude and candor in establishing a new relationship or fixing a troubled one. "Get off the PowerPoint and corporate B.S., and start talking in direct, understandable language with [your] clients," says Phil Fersht, CEO of outsourcing analyst firm HfS Research. Try being forthright, whether you're talking about cloud computing, offshoring, or layoffs.