In this series of blogs, Paul Hart, IBM, shares his observations and thoughts on outsourcing governance to consider during your next governance meeting.

Expectations play a key role in determining the nature of a relationship between a client and a provider. Outsourcing contracts will rightly focus on precise solution definition and scope, performance metrics and commercial models. However, it is rare for a contract to clearly articulate the very real and often personal mutual expectations which have been formed during the bidding process. These expectations will influence perceptions of success all round - irrespective of actual delivery performance.

I have witnessed several examples of the client and service provider having differing views of their relationship. Varying degrees of ambiguity around roles, responsibilities and contribution to business outcomes can lead to frustration, irritation and friction. A general and pervasive misunderstanding of value expectations, which have been left implied or un-formalised, can lead to seemingly unreasonable behaviours and in the worst cases outright conflict. Allowing these issues to fester undermines trust and introduces risk, which can sometimes be hard to recognise initially. So, managing the relationships between client and service provider(s) is an absolute ‘must do’. This holds especially true when such relationships are typically long term and rely on a high degree of mutual dependency for success.

It is crucial from the outset for everyone involved to establish and clearly communicate jointly agreed expectations and objectives. These can be described within a relationship strategy, which provides the business context for driving appropriate behaviours and attitudes. A clear relationship strategy will help shape and influence the governance orientation.

Service providers and clients should establish jointly agreed rules and guidelines that describe how to work together and more importantly what to expect from each other. Together, it is possible to take a much more positive and proactive role in articulating the respective expectations for the relationship. People bring the outsourcing relationship and corporate values alive, but there is still need for a disciplined management regime to provide organisational responsibility, accountability and continuity.

Successful senior management and leadership teams actively embrace governance as a powerful tool for resolving issues, enabling effective decision making and providing clear direction. It’s about the right people coming together at the right time, to get ahead of the game through effective leadership and control.