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The Key to Successful Sourcing is Not Service Provider Size but Collaboration

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by John Cawyer

We can no longer assume that today’s IT sourcing transactions are awarded primarily to tier-one providers as they so often have been in the past. The provider playing field has broadened dramatically over the past few years, and enterprises are increasingly committed to finding a solution that best fits their needs, even if it comes from a smaller, nimbler niche provider with whom they’ve never worked.

Given the spate of new provider options to choose from, we are finding one simple criterion more important than others when ensuring success for enterprise buyers, no matter who they might consider to deliver their IT services. That criterion? Collaboration.

Collaborating with providers means sharing information at every phase and in every aspect of the deal, from confirming requirements and assumptions to validating draft proposals and contract language. The result is a smooth and efficient engagement that allows providers to be confident in their solutions and pricing. And, equally as important, collaboration helps build trust among the parties.

But collaboration is only as successful as the communication during the proposal and negotiation phases. The messaging, requirements and desired outcomes must be well thought-out in advance, and they must be accurate. When it comes to provider proposals, the old adage of “you get what you ask for” could not be more true. The messaging a buyer provides in the collaborative conversations is what drives the provider solutions, and the more succinct the messaging, the quicker and more relevant the solutions.

Though this degree of collaboration is foreign to some buy-side enterprises, most are easily convinced once they experience the benefits. Not only does collaboration during the proposal phase mean responses are stronger and more in line with requirements, but it also means the client and provider can begin the engagement with a trusting relationship in which both parties have a much deeper appreciation for the needs and goals of the other.

An experienced sourcing advisor has the skills, experience and provider relationships to facilitate the collaboration between the parties so the provider can better translate client requirements into a value-add solution and the client can benefit from a low-risk and implementable solution that addresses its business problems. The trust and clarity that’s established at the outset through a collaborative approach serves both the client and the provider well throughout the life of the relationship, especially in today’s multi-sourced environments in which collaboration between and among the client and its various providers are the ultimate keys to success.

As one mid-sized provider recently stated after signing a contract with an ISG client, “We rarely if ever have this kind of exposure and cooperation from a potential client. We have more confidence than we’ve ever had in our solution and corresponding pricing. We’re working another deal on which we and the prospective client have been struggling along for 18 months, with no end in sight. We wish every deal was run as collaboratively as this deal.”

So when considering provider candidates for that next engagement, do not hesitate to test the waters with what you may have once considered unconventional providers. And—above all—keep the process collaborative. Contact me to discuss further.

About the author

John Cawyer, a director in ISG’s advisory organization, has over 25 years of experience in the Information Technology industry as both a supplier and an advisor, including 15 years with ISG. His strong analytical, communication and evaluation skills produce quick understandings of his clients’ needs and effective direction and recommendations. John offers expertise in all aspects of the sourcing evaluation lifecycle ranging from front-end internal cost analysis, strategy and assessments, contract structuring and negotiation, service transition management, contract financial management, and contract restructuring and renegotiations.