Sourcing Speak

A recent survey conducted by Accenture and the Shared Services & Outsourcing Network found that 2/3rds of respondents believe conversations with customers and providers about IT performance focus too much on SLAs, and not enough on business outcomes. No news here…after all, the industry has only been talking about managing to business outcomes for oh, the last twenty years or so. Why do things never change? Service providers naturally focus on SLAs – it’s the way they quantify and measure the performance of their services. And let’s face it, much of the ranks of IT leadership have their roots in service delivery, so they tend share the same IT-centric perspective. So we end up with a closed-loop feedback mechanism that keeps us speaking only in terms of, well… SLAs.. The way to escape this “deadly embrace” is to break the mold, and that involves changing mindsets. Let’s look at how this can be done.

First, the demand side. Clearly, a Business Analyst who engages his/her customer in a discussion of Severity 2 Incident Response Times (or substitute your favorite SLA) deserves the glassy-eyed stare s/he gets. But even a more business-focused discussion may not get the IT department much further. For example, take my candidate for the most often-cited and over-used business outcome of the new millennium: “Agility”. So, what does being agile really mean? The ability of IT operations to respond to fluctuations in processing demand? Or perhaps the capacity to quickly resource and deliver IT projects to support new business requirements? How about the capability to act as a business enabler by proactively evaluating emerging technologies and their potential to drive new offerings? And while we’re on the topic… does “agility” mean the same thing to the Chief Sales Officer as it does to the SVP of Supply Chain, or to the CFO? No wonder it’s not easy managing customer expectations! The view, however, is worth the climb, and here are a few practices I’ve found useful in getting there:

1. Make it personal. Find out how your customer’s performance is measured. If the relationship allows, try to discuss what is personally important to your customer (i.e., what outcomes drive his/her compensation, standings amongst peers, chances for promotion, etc.) There’s no better way to cement a business relationship than by showing a genuine interest in helping your colleague attain his or her personal success.

Over at CIO Update, John Hughes has recently written some advice for CIOs (Somewhere Between Abdication and Control Freak) that, coincidentally, is quite relevant for those charged with managing suppliers delivering services on an outsourced basis.

The premise is that an optimal solution for leadership exists somewhere between completely abdicating responsibility and pestering everyone until they give up and do it your way.

While I’ve heard of leadership being described in many ways, likening it to keeping plates spinning on thin wooden poles is spot on, as is the portrayal of abdication being the equivalent of starting up the plates and then walking away and micro-management having the effect of severely limiting the number of plate spinners that can be watched managed at a given time.