From comfort zone to common sense: The truth behind client-supplier relationships
Tuesday, September 15, 2015
In the world of IT, two entities face each other: the client and the supplier. And to push matters one step further, the client (generally the CIO or a management structure in the IT department) has to handle its internal clients, the business units and the users. Similarly, the supplier (generally a delivery manager) has to handle its internal management, which requires financial performance on the contract, whatever it may be.
In many cases, the relationship between the client and the supplier resembles that of master and slave, and there is not much evidence of trust and real communication. The growing implementation of sourcing contracts too focused on SLAs, KPIs, overstructured ITIL processes and the like has resulted in less-than-performing contracts. They spend more time on reviewing indicators that no one believes in rather than constructively finding the right solution to solve whatever problem or crisis.
This is not to say that reference libraries, SLAs or KPIs are not necessary. But past experience has shown that both clients and suppliers settled into a relationship they thought was comfortable because it relied uniquely on quantitative information. And at each steering committee, conversations would be endless, sometimes even overheated, on how to interpret such indicator.
Furthermore, user surveys would reveal time and again a significant difference between perceived service levels and measured service levels. They would highlight the notion of "watermelon" KPIs: green outside, red inside.
At contract termination, the client would then consider that the supplier was not good, and that it was necessary to do an RFP in order to replace the incumbent supplier. And, of course, the same story would repeat itself with the new supplier after a significant amount of time spent on transition and ramp up and dissatisfied users.
While these supposed best practices might feel like a certain comfort zone — after all, terms and conditions usually provide for penalties if service levels are not respected — they prevent the parties involved from creating a collaborative environment where responsibilities are shared and discussed, and where manageable continuous improvement solutions are defined and tracked simply. The client and the supplier have not found the grounds to establish a trusting relationship.
What might be a solution to evolve in a more dynamic context, particularly with the onset of such approaches as LEAN and AGILE or DEVOPS? While these are buzzwords, they convey an important notion: working together at all levels and throughout the life cycle of a project or contract is key. Communicating and collaborating every which way allows for better results.
This is not an article on methods, but a suggestion to move the IT world toward less-stringent contract conditions to set up a common-sense approach whereby all parties would collaborate up front and agree on how to work and on the roles that would be needed to govern the contractual relationship. In other words, let's move to a completely different set of values to give the opportunity to the IT function to positively support the business.
The challenge remains for clients and suppliers to have the sufficient maturity level to break the ice and introduce new rules of the game, while still being capable of measuring and tracking results. Key stakeholders should sit back and trust the IT management and the supplier executive delivery management to provide solutions, which ultimately result in business growth and user satisfaction.
The rules of the game must include communication with the business and with the users in a way to focus on improvement and not on blame. And the supplier must be given the level of autonomy required to perform contracted services.
In conclusion, take away a few key points. Managing a contract is not the same as managing tasks. The path to fully implement this function is a significant transformation, be it for management (CIOs) or for technical teams.
Convincing stakeholders that trusting one's supplier and using common-sense collaborative approaches is the right solution can be a lonely path. But if you stick to your beliefs and you work closely with your internal clients and suppliers, the indicators should all turn green.
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