Collaboration agreements in a digital world

Multi-sourced digital services require a different sort of commercial agreement.

Something with a different tone from those associated with either prime contractor or multiple individual client-managed contracts, something that fosters collaboration[1][2][3].

Experience shows that typical outsourcing agreements rarely encourage the change in behaviour that collaboration requires and needs. These contracts put the prime contractor in charge; they control how all things are done and are often opaque. Client-managed contracts on the other hand have difficulties of their own; they usually result in discreet silos of activity with disparate contractual and performance terms.

Collaboration requires instead a series of individual agreements that are consistent with an overall commercial framework. This framework should lay down the “rules of the club” that client and providers will abide by and adhere to; it should also enhance transparency and eliminate ambiguity about each parties roles and responsibilities.

For example:

  • All of the providers each have a separate direct contractual relationship with the client.
  • Relationships between the parties are on an equal footing; instead of a prime contractor who controls the providers, there is a Service Integrator who is empowered to manage and coordinate the service providers and is accountable for service performance. For this to work all parties, including the client, need to understand, honour, and formally recognise their interdependencies.
  • The client, Service Integrator, and service providers operate as an ecosystem that is operationally bound together by shared e-2-e service delivery obligations i.e. SLAs and detailed OLAs, to remove ambiguity and drive collaboration.

The framework, whilst clearly defining who is accountable for what, also should encourage and facilitate change – particularly a change towards a more collective approach to dealing with problems, their fundamental causes and comprehensive solutions.

There are challenges in setting up such a framework, but an experienced Service Integrator can play a vital and essential enabling role.

Service Integration is a radically different way of doing outsourcing it offers control, flexibility and efficiency through the building of collaboration, however all parties must be committed to it. This applies not just to new providers, but also to existing ones, who need to be willing to accept commercial change and alter their behaviour.  

When fully embraced collaboration is a “win” for all in the delivery of value to the business, however, it requires new ways of thinking, and very new ways of working, both of which need to be underpinned by a new type of commercial agreement.


[1] Capgemini, “Contractualizing Collaboration”, https://www.capgemini.com/resources/contractualizing-collaboration, 2014

[2] FieldFisher, “A Perspective by Fieldfisher – Injecting Life Back Into SIAM – Lessons Learnt and a New Model for Success”, 2015

[3] Kemp Little, “Multi-Sourcing: Maximising the Benefits and Addressing the SIAM Challenge”, 2014

 

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