Forgetting the Contract and Waving Our Rights

One of the most critical parts of every outsourcing relationship is just that – the relationship. I believe that a good beginning of this relationship is a good contract. If there is a fairly good idea about what’s to be done, the chances are that you can avoid major disagreements. However, once the relationship goes to a point where every conflict solution starts in the contract, formality and bureaucracy will threaten to take over the relationship. More than one outsourcing relationship seems to have ended there.

In our current relationship I have a feeling that we are right now balancing on a limit between relationship establishment and permanent conflict. We’ve spend almost a year establishing finalised descriptions of all services, we have an advanced model for relationship handling and permanent meeting forums. The only problem seems to be that we’ve been in contract establishment so long that everyone is now getting tired of us. It’s time to create some action.

Action however, takes curage. As a purchaser I am used to the fact that my role is not a popularity contest in the eyes of the supplier. However, you always have to be careful not pushing this too far. On the other hand it is all the more important that this slightly unpopular role in the eyes of the supplier is compensated by a strong internal support. The last 24 hours I realised that our support is have kind of a baisse.

The main problem according to our application managers is that meeting forums aren’t established, the ITIL based idea of a change advisory board isn’t such a popular idea by all departments, and in general we are also criticised for not being informative enough about what goes on in contract management. Finally, as far as I know, we also get criticised for taking to long to communicate routines for orders based on our framework agreement, and for being to ambitious in the routines we’ve established.

Now, there is only so many conflicts we can handle at once. Furthermore, and this is interesting, our supplier has been extremely quick to form an alliance with the less satisfied application managers in our organisation. So, all of the sudden, from one day working to make sure we get the most out of the contract with a supplier on defensive moves, we have now moved to a defensive position with a supplier working on the offense to give us heat.

In this sense today marked a shift in strategy. From a strategy where we have been devoted to make the contract run the relationship we need a quick shift to a relationship based on good relations. This poses some specific challenges to me, and they take some courage. It is time to start having workshops about work routines and launching meeting standards that are not completely finished or describes in contracts. I will also need to consider order routines that are clearly less that adequate, in order to make people use any routines at all. These preliminary projects also mean that from a contract management perspective we risk loosing rights that could come out of an advantageous contract interpretation.

These risks are worthwhile from a pragmatic point of view. The problems we have been working on for a while, like the cooperation contract clauses, may be important but it seems clear that they are not the main concerns of the users of the contract. Instead, practical everyday problems are in other areas, such as making our service desk work according to routines that are common, no matter if they are in the contract or not and even if a wider audience workshop should mean that we loose some detailed right even if our contract specialists could have made the interpretation more advantageous in some specific detail.

After all – sourcing and contract management are to make sure that we get most of the delivery, not that we get the most out of the contract.

The Prima Donna dilemma

In our outsourcing relation one of the more difficult parts to handle is internal staff and, in particular, experts who are not satisfied with the external delivery. The friday meeting I told you about was largely devoted to a few people who, in spite of good intentions and large competence, are facing the risk of sabotaging the affair. They are very skilled, but slightly too confident and self aware. We labeled them Prima Donnas.

The base of the problem is classical. You have the technical specialist, the systems programmer or the mainframe expert or such. They are totally the Kings and Tsars of their areas. Consequently they are also difficult or impossible to replace. Knowing this they also get away with taking on different kinds of freedoms, may it be horsetail haircuts, long beards or simply the issue of never taking a shower before work (let alone taking a shower at all).

In classical IT you’d simply move these people to a basement and keep using their services anyway, disregarding of their bad habits since they never meet customers – an arrangement both paries frequently appreciate. In the modern outsourcing world the mainframe programmer comes in an upgraded version, by our supplier cleverly named”Prima Donnas”. Wikipedia explains the term:

Legendarily, these “prima donnas” were often regarded as egotistical, unreasonable and irritable, with a rather high opinion of themselves, not shared by others. Although whether they are truly vainer or more hot-tempered than other singers (or than any other people in the opera houses) is highly debatable, nowadays the term often signifies a vain and temperamental person who, although irritating, cannot be done without. (source: wikipedia)

The Prima Donnas differ from the basement mainframe programmer in that they are socially more well adjusted, and normally have an adequate and good relationship with their surroundings. Their skills are of technical nature,  like in our case they are  a few of not too many people in our own orgnisation knowing  the  far ends and corners of  our infrastructure.

While the mainframe-nerds can run their bosses and wag the organisations tail by simply not helping to achive the desired operations. When operations are outsourced however, the Prima Donnas are stripped of their  main source of power: other people learn how to run the machines. In our case, and it would surprise me if this is a unique situation, the Prima Donnas developed a genuie hatred to this new people, who, according to our Prima Donnas are mere idiots.

In management we thus meet a new kind of problem. We want give the Prima Donnas back their machines, but we need them to talk to the people who run the(ir) machines. We need them to take responsibility of representing us when technical redesign is discussed in situations were redesign has major effects on our long term costs or technical capabilities. They do,  however, not work very well in this situation when they also keep defending their status by explaining everything that the supplier does wrong.

Now, our supplier has been working for four years in the infrastructure operations, and they are starting to get fed up with the prima donnas. Their staff doesn’t want to talk to someone who helps them initiatally, but then as soon as something goes wrong, are the first to critisize the “incompetence of the supplier that should be replaced”.

Internally the Prima Donnas  pose a problem because their explanations of what goes wrong are very credible and in the aftermath of a disaster it is easy to be the wise guy who knows what could have been done better. They keep up their guru status by making sure this message is spread to a wider audience in the organisation, which in the short term undermines all confidence in the supplier, but in the long term undermines our own organisations confidence in it-management and the it-department. People start asking the question “Why did they hire that firm, if they are such idiots?”. In the long term the prima donnas are thus scaring away the audience from their own opera.

Why don’t these normally smart people realise this? One theory we are acting on that they have a diffuse notion of what we outsourced. Whereas the thruth is that we outsourced operations, we kept responsibilty for the suppliers mistakes. The Prima Donnas act as if the opposite was the case: They keep supervising operations, but feel that someone else has taken over responsibilty.

The outcome of fridays meeting was that we will adress this problem by making the roles clearer. We will need to explain the issue of kept responsibility for the suppliers every mistake, at the same time as we try to look over some key positions. There are people here who are to fed up with each other to keep working together. On the other hand they are prima donnas on both sides, and cannot easily be done without. My guess is this will be a series of articles before I can report the problem solved. In the meantime, your comments and advice would be most welcome!

Todays agenda…

As most days today includes a few meetings. A most interesting meeting will be around lunch, when one of the senior managers of our suppliers will come over to our office to discuss how to handle our supplier of IT-infrastructure operations. Should we purge the entire company or just the operations manager? After that debate, we’ll have lunch and then I’ll meet the operations controllers to get my weekly update on operations and status of developement projects. After that – finally – there will be friday beer!

Hello world!

Hello world!

 I am Mark Carpenter and I am managing the IT contracts for a quite large organisation. Contract management and sourcing requires a certain amount of discretion. Developement of competence on the other hand requires open dialogue with your fellow contract managers. To make this possible I created this blog for the public posting of my thoughts and concerns. Hopefully you will find them useful. Hopefully you will be usefull to my by trackbacking or commenting. Maybe your into sourcing too. Maybe your an analyst. Maybe your a curious student or just a curious being.

Welcome here, no mather who you are! Be aware however, that I am not Mark Carpenter.