Why Gulf outsourcers need marriage guidance counsellors

Much like the flourishing business advising those in romantic relationships, there is a thriving industry whose primary task is to help companies manage their outsourcing partnerships to build trust among the partners.

At a recent informal dinner attended by a group of chief information officers representing some of the UAE's largest companies, a discussion began on what kind of talent was the most difficult to find on the market today. The usual suspects, database programmers or web designers, were quickly struck from the list. It was agreed instead that a manager who can handle the relationship between a company and an external vendor was the most elusive, and so the most in demand.

The ideal candidate for the task, the majority of those present said, was an experienced sales or delivery manager from an IT service provider. A management consultant, familiar with both IT and the industry in which the company operates, would be the perfect applicant. The demand for such people far outweighs supply, which is where boutique consultancies or larger corporate technology specialists often step in.

"The GCC is short on manpower. Skills and talent are in high demand," says Saad al Wabel, the Middle East regional director of Quint Wellington Redwood, a management consultancy that specialises in helping businesses to manage outsourcing partnerships. "This is what pushes companies to outsource." Although a shortage of skilled technical workers is a logical reason to seek outside support, it also represents a vulnerability.

Managing the relationship between the company and an external partner is a tough task that relies largely on knowledge gained through experience. Finding the right people for the job is as important as finding the right partner, particularly in a company already short on good people. The word you most often hear when talking to business people about outsourcing is "relationship". Hearing hard-headed numbers men explaining how relationships break down because of a lack of trust, or talking about the importance of openness in a healthy relationship, can give the impression of a particularly emotional segment on the Oprah Winfrey Show.

There are indeed a number of ways in which the experience of outsourcing can mirror the more personal relationships we all know so well: the exhilaration and celebration of the initial matchup, the tough times when nothing seems to work and the central importance of trust, honesty and open communication. "There are three main phases in a contract," says Francois Barrault, the former chief executive of BT Global Services, one of the world's largest technology service providers.

"There's the champagne day, the wedding. Everyone is happy, big contract, we announce US$100 million (Dh367m) in revenue, they announce they are going to cut costs. Then it all goes in the toilet, everyone is unhappy, it's awful, people working so hard. Then there is point three, which is business as usual." Much like the thriving industry of marriage counsellors and relationship experts, a growing number of jobs now exist to help companies manage their outsourcing partnerships. These people help companies establish and maintain a healthy outsourcing relationship, which is less common than you might imagine. Although the figures vary, most surveys have found that at least 40 per cent of all outsourcing agreements end in dissatisfaction.

In the Middle East, Mr Wabel thinks the figure is much higher. "I have never seen or come across a successful deal in the region," he says. "It's not about the vendor or client, it's the relationship." Arno Ijmker, Quint's senior partner, says: "Most companies underestimate the task they have in front of them once they outsource." Putting in place the right people, processes and governance systems are all essential for a successful relationship to happen, Mr Ijmker says.

When information technology departments are outsourced, those within the company depending on the IT team for support become customers of an external vendor. What many businesses forget is that their workers still require contact points within their own company. Often, traditional "IT guys" are not suited to the new role of a go-between for the company and vendor. "The problem with some people with an IT background is, if you know too much detail, you manage the vendor on the details," Mr Ijmker says. "But if you order a meal in a restaurant, do you want to know every little detail about the kitchen?"

What is needed among those working with the vendor is a commercial attitude, more in tune with the principles of customer service. "You may have to swap your IT people for contract management people," Mr Ijmker says. Quint often work with companies to help IT staff move from traditional technical roles into contract management. Contract management, or sourcing management, is an emerging discipline. Gartner, the Connecticut-based IT consultancy, expects 30 per cent of businesses to have formally organised sourcing management functions by 2011, although it has yet to become mainstream.

"Generally, the state of outsourcing management is very bad," Mr Ijmker says. "It may be good for us, but from an industry perspective, there is a lot of work to do." [e-mail]