I forgot the context (I am pretty sure it wasnt this one), but I rememeber the quote!

On the other hand, there’s an old saying, “Don’t take bad business!” and I think the vendor team that does tell it like it is, and fails to win the deal, probably did not want that deal anyway!

I know it sounds as if I’m still taking the buyer side to a fault, and perhaps I am, but I do think the vendor community has to help educate the naive buyer, and help them establish the context and the infrastructure that positions a winning, sustainable deal for all parties.

But top quality services will always have a price premium to mediocre services, and the vast majority of buyers aren’t willing to pay it. An almost equal number fail to invest in “everything that comes after” the deal is signed.

I have seen few brave vendor teams step up and say as much, and then go on to lose the deal, resulting in a selection process that is akin to trying to teach your dog to sit by kicking it when it complies. Not only does it not work, it isn’t right!

And, because I believe that to get to the highest levels of business-IT maturity and value realized through IT almost mandates some level of alternate sourcing, I think it’s a shame that the vendors have not conducted themselves towards a higher proportion of success stories. It’s also an opportunity for vendors to step into a leadership position by creating a new, consistently positive “we do what we say we will do” customer relationship.

That said, it seems hardly fair that all five of your reasons start with the word “Vendors”. I am sure that, if you had conversations with account execs instead of CIOs, you would arrive at a list of five cardinal sins of “clients” just as easily.

Now, let me be clear–money is flowing to the provider from the client, so the burden of performance is on the provider. I believe this–and I beat up the provider as much as the next sourcing advisor over it.

But I would argue that the some of the same same CIOs who tell you about their outsourcing horror stories are the same ones who ignored the advice I might have given them at the outset:

1. Worry about the relationship, not the deal
2. Pick the team you can work with the best, not the one with the best price
3. All the hard work comes AFTER you signed the contract–you haven’t delivered a penny of shareholder value by signing a sheet of paper attached to 300 pages of legalese! Be prepared to invest–a lot–in the management and governance of the relationship.
4. Accept that operating in an outsourced environment is different, and thus your retained processes and organization must also change when you outsource
5. Use an advisor–no matter how good you think you are at buidling an outsourcing transaction, chances are that in industry you might see four or five in a career. Good advisors see adozen or more each year. Considering the failure rate, why take the chance?

I have been on both ends of very good relationships, and on both ends of very bad ones. I’ve also been in the middle of them for several years. My advice to CIOs is that if they are not willing to invest in creating the conditions for a successful long-term relationship, they might as well forgo the initiative and save themselves the pain and suffering!