Fixing Broken Outsourcing Relationships

The Issue
For a number of reasons, the reality of IT outsourcing frequently turns out to be very different than the promise of outsourcing. Recent studies continue to find that more than 50% of all IT outsourcing relationships are considered unsuccessful – and almost 70% of IT outsourcing relationships are terminated early.

Way too much attention has already been devoted to the pros and cons of outsourcing and the right and wrong ways to outsource – but I want to take a shot at an approach for turning problem outsourcing relationships into successful outsourcing relationships.

Five-Step Plan for Fixing Broken Outsourcing Relationships
Okay, bear with me a minute while I try to explain where I’m going with this. Think of me as a marriage counselor giving advice on a troubled marriage.

From what I know of marriage counselors, they typically get involved in a marriage when things aren’t going very well for either party. The married couple typically wants the counselor to “fix” the other person or they want to get out of the marriage as quickly as possible.

On the other hand, the marriage counselor is not into affixing blame. The counselor listens to the “he did this” and “she did this” stories, but the counselor’s objective is to get the marriage back on track.

That’s what I want to do. I want to get troubled outsourcing relationships back on track. Here’s my five-step plan for fixing broken outsourcing relationships:

Step 1 De-Emotionalize the Situation
I know it’s not easy when you are in the middle of a contentious outsourcing relationship, but the first thing you need to do is relax and try to eliminate the emotions associated with the outsourcing relationship. The only way you are ever going to be able to salvage a troubled outsourcing relationship is by thinking and acting unemotionally.

As counterintuitive as it may seem under the circumstances, you have to start thinking in Win/Win terms. That means trying to find a way for both sides to win with the outsourcing relationship.

Ask yourself, “Am I ready to find a Win/Win solution to our outsourcing problem?” When your answer is “yes,” proceed to Step 2. If your answer is “no,” redouble your de-emotionalizing and Win/Win visualization efforts. If you are never able to answer “yes,” skip the rest of this briefing and start looking for a briefing on outsourcing divorce.

Step 2 Establish Realistic Expectations and Objectives
The second thing you need to do is clearly define your expectations and objectives for a successful outsourcing relationship. Think Win/Win in establishing your expectations and objectives because your expectations and objectives have to be realistic.

Actually, unrealistic outsourcing expectations and objectives are a reason why many outsourcing relationships get in trouble – but I’ll have to address that in another briefing.

When you are satisfied that you have clearly defined expectations and objectives for a successful outsourcing relationship, write down the expectations and objectives.

Step 3 Assess Options
The next step is to thoroughly analyze your existing outsourcing agreement and understand your options. Understand your options for terminating the relationship and determine if you have any leverage in getting the relationship back on track.

Step 3 is a form of negotiation. You never want to get into a negotiation without getting as unemotional as possible, knowing what you want to achieve from the negotiation, and understanding your options. In other words, you want to be in as strong a position as possible when you initiate the negotiation process. By the way, this is the position you want to be in when you initiate negotiations on a new outsourcing relationship too.

Step 4 Objectively Explore Solutions With Outsourcer
After getting yourself ready, it’s time to get down to business. As emotionlessly as you can, you need to explore options with your outsourcer. The script for this discussion should begin by saying you are unsatisfied with the outsourcing relationship and you want to explore options for getting the relationship back on track. The script should not include the word “attorneys” and should definitely not say anything about the outsourcer’s personal history or business ethics.

After getting past the uncomfortable beginning of the discussion, you should be prepared to clearly spell out what you see as the problems with the outsourcing relationship and outline your expectations and objectives for the relationship. This is where you use the expectations and objectives you wrote down in Step 2.

Depending on how the outsourcers reacts, you might want to have a printed copy of Step 1 available for the outsourcer so they can understand the importance of de-emotionalizing the situation and thinking Win/Win.

I’m kidding about having a copy of Step 1 available for the outsourcer, but both sides in the discussion of options have to keep emotions in check and understand the importance of creating a Win/Win situation. You may want to use an objective, third- party marriage counselor to make this happen.

Step 5 Communicate, Communicate, Communicate
The only way you can fix a broken outsourcing relationship is by actively communicating with your outsourcer. A lot of troubled outsourcing relationships get that way because of poor communication between the enterprise and the outsourcer.

You probably don’t want to hear this now, but doing a better job of communicating might have kept the outsourcing relationship on track in the first place. There I go, sounding like a marriage counselor again.

Moral of the Story
In some cases, ending an outsourcing relationship may be the only viable option, but there are a lot of troubled outsourcing relationships that can be turned into successful outsourcing relationships by taking the emotion out of the situation and taking positive steps to fix the relationship.

I know this marriage counseling approach for dummies is a little over-simplified, but the steps are right. Give this approach a try the next time you are considering an outsourcing divorce.