Traditional outsourcing is covered by SLA’s to make sure the buyer can control everything the supplier do. The reason is to make sure the supplier delivers what is promised at the cost that is committed. If the SLA’s are very tight and detailed it leaves little room for experimentation/innovation/learning. If the service requested is easy to define and measure it may be a good approach, but as the service gets more and more complex and more and more demanding specialist skills outside the remit of the customer it gets problematic. If only lower cost is important, the service will be optimized for lower cost. If the customer wants learning/advise/innovation there must be trust enough in the vendor providing it and results that proves it.
So, therefore I have defined 4 categories of partnerships
A – Competitors ( no trust, lowest cost, buying a product)
B – Master/Slave Partners ( no trust, lowest cost, buying a service)
C – Master/Servant Partners ( increasing trust, reasonable cost, building a relationship)
D – Equal Partners ( complete trust, value sharing, monetize the relationship both ways)
Depending on what partnership is requested there are different types of contracting approaches.
A – Traditional contract buying a product with negotiations on cost/penalty
B – Traditional contract buying a service with negotiations on cost/penalty
C – Team-as-a-Service / Factory-as-a-Service buying a capacity with negotiations on available skillsets
D – Relational contracts aligning interests with negotiations on successful ways of working together
