What Makes One Client Deal More Successful Than Another

A report by Leslie Wilcocks and Sara Cullen (The Outsourcing Enterprise - The Power of Relationships) in association with the London School of Economics Information System and Innovation Group provides an insightful analysis of the Outsourcing Industry drawing on their combined research into over 1200 organisations

Fifteen years' worth of research into information technology and business process outsourcing has produced a basic body of knowledge about outsourcing. But the focus has now shifted to what makes one outsourcing deal more successful than another.

In our study of organisations seeking IT cost savings via outsourcing, we found that good relationship management made a 40% difference in cost savings...but there are few precise findings on how such successful relationships should be developed.

The contract is an obvious - but ultimately superficial - driver of day to day behaviour...The deeper and more powerful drivers are rooted in the values and attitudes of the people responsible for carrying out the agreement.

Powerbased relationships are based on the negative threat of sanctions that might be applied to gain compliance. In power-based relationships conflict resolution becomes paramount as manipulation and blame spread. Short-term gains, 'more for less' and self interest are the abiding motifs. However, power is a poor substitute for trust, given the high costs involved in monitoring and imposing sanctions, the negative orientations and behaviours adopted, and the limitd goals that can be pursued by the parties. Therefore relations that generate trust and create a 'trust dividend' offer an important competitive advantage over those that do not. And this means moving to more open and collaborative communications, resolving conflicts constructively and seeing the arrangement as a co-dependent long term investment designed to benefit both parties.

In most cases, the client will want a balance between the two alternatives of power and trust. Extremes of either are generally unacceptable to clients or suppliers and rarely sustainable over longer periods.

The imperative for suppliers goods and services contracts (be they large, medium or small scale) to enable collaborative, trust based relationships is one FranklinCovey sees increasingly in our conversations with clients. Many are expert at the provision of systems and processes that relate to the service in question, but many have historically focused on the contract as the driver of day to day behaviours. As a result, they are less expert in what it takes to develop attitudes and behaviours of trust and collaboration, and especially the reality of scaling these to the 1000's of daily interactions which often characterise these agreements.

In these situations, FranklinCovey has broad experience in codifying and developing the mindsets and skillsets which

• measure and develop trust at team, function and organisation or project level
• enable effective consulting within the client relationship to diagnose and address ongoing issues
• help project teams move beyond coordination and cooperation to achieve real collaboration, inter-dependence and synergy
• deal with the reality of challenging conversations and conflict in daily and weekly interactions
• create a framework for the effective execution of most important project goals
• can scale / reach to the 100's or 1000's of people that may be involved

and in the process achieve the kind of efficiency savings identified in the research by Willcocks and Cullen.