A recent Coopers and Lybrand survey of 428 high-growth companies revealed some disquieting news. Over half of the companies surveyed were dissatisfied with the overall results of their outsourcing agreements. Things, they said, just didn’t get better.
Specialization, once primarily the domain of physicians and attorneys, is spilling over into other fields in the ’90s. CPAs specialize. Writers specialize–even some dog groomers specialize in certain breeds. IT is no exception.
If you’re contemplating an IT outsourcing relationship, forget about the 10-year, fixed-price arrangements of the past. Those cash cow deals have been butchered by the pace of technological change.
Ah, the honeymoon stage of a business relationship, that early stage when everyone is enthusiastic, when you envision benefits that will continue to multiply, when you celebrate each small increment of success. You’re focused on the objectives of the agreement. You talk frequently. You nip and tuck and shape exactly the relationship you know you need.
If it’s not broken, don’t fix it. Hyatt Hotel Corporation put a new spin on that old adage in 1996 by ‘fixing’ the company’s well-functioning IT organization before it broke. The result is an outsourcing agreement that continues to deliver Hyatt’s high standards of customer service while providing the resources to plan for the future.
Culture shock. That’s not something most would expect conservative icon Rolls Royce to embrace, but that’s exactly what the company sought in its outsourcing relationship with EDS.
You’re in the final stages of your outsourcing agreement. You and your outsourcer have worked out pricing, processing, staffing. Then up pops the devil in the form of third-party software licenses.
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