Service Integration - improving client-supplier relationships
Relationships are key to outsourcing success, but most client-supplier relationships today are more like the one between an old-fashioned parent and a child than between adult and adult. They tend to deteriorate over time as each setback is followed by finger-pointing, rather than by constructive steps to prevent the problem from recurring.
A Service Integration approach enables healthier, adult-to-adult relationships because the Service Integrator is a key stakeholder who is motivated to work with client and ecosystem suppliers to find solutions to problems. The result is a network of relationships that continuously improve, are mutually beneficial, and support the transformation of the client’s business.
It isn’t easy to change the rules of the game, but we have found that the Service Integration approach can do so by creating a different and healthier type of relationship.
The Service Integrator (SI) is neither an agent of the client nor a tower service provider, but sits between the two parties. The SI has “skin in the game” – it’s accountable for the service performance of the ecosystem – and therefore it is motivated to get all the parties to interact in the right way and honor their obligations.
Restructuring the outsourcing arrangement in this way can transform the nature of the relationship. When there’s a challenge, instead of the client immediately blaming the supplier for not fulfilling its promises, the SI can investigate why things have gone wrong, explain, and take steps not just to rectify the situation but to ensure (as far as possible) it doesn’t happen again. The SI’s position means that it can, if necessary, recommend that the client – not just the supplier – changes the way it behaves.
The presence of the SI means that outsourcing can, at last, start to fulfil the promise of continuous improvement. Indeed, the whole relationship between supplier and client should improve over time, rather than deteriorating, as happens too often at present.
With the SI acting as an interface between client and suppliers, the relationship naturally becomes more equal and less adversarial. Rather than being geared up to identify and penalize individual failure, the network of relationships is geared to collective success.
In place of the traditional parent-child type relationships between clients and suppliers, Service Integration creates a new set of relationships between adults – consenting ones of course! – that support the aim of business transformation.
You may like to read our other papers explaining the practicalities of Service Integration. And if you’re currently wrestling with difficult outsourcing relationships, please contact me to discuss whether this approach could help you.