After many years of putting outsourcing agreements in place which haven’t always delivered to all parties expectations much work is being carried out by leading practitioners to establish new ways of working and types of agreement.
This NOA event focused on two related aspects of this thinking. Initiatives on partnering relationships including the new British Standard on Collaborative Business Relationships BS11000 and outcome based agreements.
Outcome Based Agreements set out the case for the development of a new way of working, underwritten by new procurement approaches and contract requirements, focused on the delivery of business outcomes. As set out in the Intellect paper “a better way to do business”, OBAs propose that business relationships should no longer be based around the arm’s length supply of technology services, but on a partnership focused on the delivery of business outcomes in which both parties have a committed stake.
Charles Ward, COO and Director of Software, Intellect, introduced the event and welcomed everyone to the Intellect offices.
Paul Hart, Senior Managing Consultant IBM Relationship Alignment Practice & NOA SIG Member for BS11000 presented on the BS11000 – the new standard for Collaborative Business Relationships.
Paul Hart said: “Organisations should be aware that the way to get the most out of their agreements is to collaborative. One of many challenges is for companies to share a common understanding of shared terminology and the main expectations, which should all be documented.
“A good cultural fit is essential between the two parties. The BS11000 should help to address issues which may occur out of cultural misunderstandings and promote standardisation in the industry. Outsourcing deals can often become stale over time, the drive and passion seems to wane. Knowing how to incentivize is extremely important.”
Lauren Tennant, Contract Performance Manager, The National Trust, provided a case study on a successful ICT / business partnership
Lauren said: “Relationships are only as good as the partners in that relationship. Mutual investment and commitment is essential and for transformational partnerships to work you need to be brave and use the expertise of your supplier.”
Dr Richard Sykes, Intellect, presented Towards Outcome Based Agreements: Procurement for Performance, Agility and ‘Edge’ and highlighted three main transformation issues - Agility in the face of accelerating change, Delivering Assurance and a Market Shift in Behaviours - Both Parties Need to “Want To Do This”
Peter Hands, Logica Outsourcing Services UK MD said: “Making sure joint governance is done properly is a no brainer. I have seen contracts where pricing is defined and a pain share / gain share is not. This can be a disaster.”
The event came to a close with a presentation on the ‘Legal Implications of Partnering and Outcome Based Agreements by Barry Jennings, Partner at Bird and Bird.
Barry said: “Importance of transparency should not be sacrificed in a relationship and should be separated from the outcome. From a legal perspective, it should be clear what information is going to be passed between parties.
Bird and Bird Future Trends
1. More hybrid models of risk and reward
2. Consideration of Joint ventures and mutuals as a way of delivery objectives
3. Shorter, more agile contracts
4. The definition of standard outcomes and replicable processes
5. Growth in gain share mechanisms.
6. As technologies and services commoditize, emphasis of supplier evaluation will shift to value add and business fit
7. Less contractual commitment = less certainty
For access to all of the speakers’ presentations from this event, please visit the members area of the NOA website. www.noa.co.uk
