Insights for today

• A bit of contracting theory … the role of the “expert” in service provider relationships

• Outsourcing: How to go about procuring and contracting to focus on Outcomes

• Outsourcing: How to spot when it might be going wrong

• Outsourcing: Things to avoid doing as the client

Who is the “expert”? : Input-based services

• This is the traditionally understood relationship in which the buyer genuinely is the “Expert”

• The buyer knows what it wants and needs, and the provider must deliver to the buyer’s specification and plan

LOW HIGH

Client dependency on provider advice

• Effectively the buyer is actually “sub-contracting” clearly specified elements to the provider

• The risk is if the specification is wrong or the buyer has misunderstood what the provider is going to supply, that is often the buyer’s problem

• This type of relationship, by its very nature, is for very functional or transactional type services

Who is the “expert”? : Output-based services

• In this relationship, the buyer has much more reliance upon the provider’s advice & expertise (“the Expert”)

• There is “mutual expertise” between buyer and provider, but the buyer goes to market for Expert insights, skills (and usually technologies) to help

• The buyer also brings skills to the table (but not necessarily as the Expert), it is a collaborative approach … it’s “done with the buyer”

LOW HIGH

Client dependency on provider advice

• The buyer would typically say “here is our problem” and together with the provider (as the Expert) will use their skills to solve it

• This type of relationship tends to see specialist input