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Insights
It All Begins with a Plan

Customer Voice
Success - Without Reservations

EDS Outsourcery Wins Award

Legal Voice
Surviving the Software Minefield

Supplier Voice
One...Two...Three...
Flex

Specialization Thrives in the 90's

Analyst Voice
Planning Beyond the Honeymoon

How Good Do You Want to Be?

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. Today, the successful deals that are being carved out rely heavily on flexibility and mutual respect for objectives and business realities, according to Jeff Rich, president and chief operating officer for Affiliated Computer Service (ACS).

"We need to improve our levels of service continuously if we're going to maximize our long-term relationships," said Rich. "If we don't provide the flexibility that our clients need to deal with their business realities, we aren't going to have that relationship for long."

Flexibility begins in the planning stage. Rich said his company actively participates in its clients' planning processes.

"Proactive planning and constant communication are crucial elements of a successful outsourcing relationship," he said.

The outsourcer needs to bring to the table practical knowledge and experience for clients who are coping with the rapid pace of technology. "The more technologies and service models you have real life experience with, the better," said Rich. But that's only one piece of the puzzle. Equally important is having in place a method of measuring quality of service and the success of the client.

"Our service level performance is measured everyday, using metrics that are important and unique to each client," said Rich. "We also survey our clients regularly and set up independent feedback loops through our account management structure and regular executive contacts."

When planning identifies an outsourcer with the knowledge and experience to meet the pace of technological change, clear channels of communication are established, and service levels are measured, the stage is set for success. The final element is flexibility.

"Our current contracts have a lot of flexibility built into their structure," said Rich. "We offer our clients the ability to react more quickly to changes in their business environment than they could if they still had an in-house infrastructure."

Lessons from the Outsourcing Primer:

• The pace of technological change requires flexible outsourcing agreements.
• Outsourcers should have practical knowledge and experience with diverse technologies and service models.
• Arrangements should include some method of measuring value.

Publish Date: July 1997

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Copyright © 1997 - Everest Partners, L.P.

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