Savvy customers now battle-ready

According to Albert Silverman, senior vice-president, IT Advisory Services for PricewaterhouseCoopers LLP in Toronto, one of the biggest trends in the outsourcing game that has led to an increasingly selective group of customers is the rise of the well-prepared IT services buyer.

“It’s been rare in the past for IT organizations to be well-prepared to outsource,” says Silverman. The process was “typically directed from above without much time given by a CEO” to their CIO to find a suitable outsourcing partner.

“More and more CIOs are understanding that, as part of the IT strategy process, as part of building their annual strategy, they need to have a sourcing strategy. This doesn’t necessarily mean they are going to outsource. It means they have to be prepared to answer the question, ‘Does it make sense for me?’”

Adds Silverman: “If I’m a real smart CIO and my CEO walks in and asks what our position on outsourcing is, I should be able to reach into my desk and say, ‘Here is our position, here is what we think would be the pros and cons.’” CIOs who are prepared in such a manner are now ready to run in “plan mode” instead of “react mode”, the analyst says.

The importance of preparedness on both sides of the contract is imperative for success. After racking up 20 years of experience in the outsourcing arena, Silverman believes that if a deal is not going to be a win-win for both the client and the outsourcer, it’s not going to be a good partnership. At the end of the day, he says, it is not going to survive.

“They will never achieve their service-level agreements, there will never be well-defined scopes of work, change management will not be well-defined, there will be no shared risk model, and there will be no flexibility to adapt to changing business needs. I think a lot of these deals fail because they are poorly architected.”

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