Relational Outsourcing and The Role of Service Level Agreements (Part 2)

buy ib extended essayp>I could not agree with you more Jon. However, i would like to describe how service and service levels are viewed in a relational model. First let’s remember that one of the 6 attributes of “Relational” is “Alignment”. For those who are still using traditional project management practices to manage relationships, “Alignment” means that no matter how much effort you will put into planning and defining a set of services and associated service levels, they will be proven wrong or inadequate at some point in time. If you do that you are effectively placing yourself in a “straight jacket” and will become hostage to the “Change order process”.

Comment from Andy Akrouche regarding April 4th, 2012 CI post “Relational Outsourcing and The Role of Service Level Agreements (Part 1)

While I had originally planned with this second part in the series to delve deeper into the paper discussing the impact of SLAs on the relational IT outsourcing contracting process – something that I will be doing a little on in this article, the above referenced comment regarding my first post caught my attention.

Specifically the suggestion that the reliance on rigid contract terminology as a means of ensuring vendor performance is actually contradictory to what is really required to achieve outsourcing initiative success.

In this regard, the comment appears to align itself with the The Role of Service Level Agreements paper’s conclusions pertaining to role that SLAs can play in “fostering harmonious, cooperative relationships that have high levels of trust and commitment.”  This includes the empirical examination of the specific characteristics of formal contracts that “help in building partnership-style relationships.”

The latter part of the above paragraph itself suggests that the “Alignment” concept to which Andy Akrouch referred in his comment represents what can be called a living document by which the contracting guidelines are somewhat elastic in that they can adapt to changing realities or market conditions.

Besides representing a major departure from the belt with suspenders approach that purchasing departments have traditionally employed to achieve desired results relative to outsourcing, it is the further suggestion by Akrouche that the “effort you will put into planning and defining a set of services and associated service levels,” will ultimately “be proven wrong or inadequate at some point in time” that is most noteworthy.

Now at this point some may suggest that adaptability to changing circumstances can be effectively managed through the change order process associated with traditional (there’s that word again . . . traditional) project management practices.

Akrouche, as do the authors of the paper, disagree with this assessment.  In fact they go so far as to suggest – at least Akrouche does, that by adhering to the familiar change order process one effectively places themselves in a “straight jacket.”   Or to put it another way, instead of serving the best interests of the parties to the outsourcing contract by creating proactively effective guidelines that foster a greater relationship, the parties themselves become a slave to rigid contract terminology that will likely prove to be ineffective and irrelevant over time.

In essence, what is being suggested is that “formal contracts and relational governance function as complements, and not as substitutes,” leading to what one can reasonably surmise is a collaborative effort of give and take interaction as opposed to the blind enforcement of what I will call dormant terms and conditions that are based more on legal-speak as opposed to delivering a practical execution value.

In this regard, in which relationships serve as the lead metric for both managing and measuring the effectiveness of an outsourcing contract, we need to align what the paper calls the three relational governance attributes being relational norms, harmonious conflict resolution, and mutual dependence with the three corresponding SLA characteristics of foundation, change, and governance to ensure outsourcing success.

In subsequent installments to this series I will examine the specifics surrounding relational governance attributes, followed by a in-depth review of the SLA characteristics, including the eleven contractual elements to which the report refers.

I will also take the time to look at Andy Akrouche’s “Five Barriers To Becoming Relational” as a means of identifying a specific course of action that can be pursued by both contractors and their vendors to ensure outsourcing success.

In the meantime, how would you define the term relational outsourcing relative to its practical application to your present situation?

What are the keys to relational outsourcing success?



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