On October 12, Sourcing Nederland organised a seminar “an alternative view on sourcing“. We heard an interesting story about mediation from Lieneke Viergever and Patrick Wit. I was provided the opportunity to share some thoughts about alternative ways of selection and contracting. Many of my suggestions are inspired by the world of Agile Software Development, and for that reason, we1 labelled this ‘Agile Sourcing’. It was an interactive session with an interested, knowledgeable and critical audience. Hence, all the ingredients for a good conversation were available.
Do you think we can try something else?
Recently, Sourcing Nederland published a booklet titled “Sourcing Life Cycle – Framework for a Consistent Sourcing Strategy”. The booklet contains a solid, somewhat traditional description of outsourcing processes. The focus lies on structure and content. The contract is a clear goal and plays an essential role in what follows.
During the seminar, I attempted to add some elements to the mix: more attention to the relationship and the interests of all parties and several options to expedite the process. Furthermore, I indicated how, in my view, the power balance shifts when a contract is signed and what impact this typically has on the overall process.
Well, yes, but…
The advantage of ‘best practices’ is that they feel familiar. Over the years, the initial problems have also been resolved. And a suggestion to do things differently raises resistance or at least questions:
- Well, yes, but if you expedite, will that not introduce some recklessness? Indeed, the goal is not to do the same amount of work in less time. So, there will be actions left undone and topics left uncovered. Signing the contract sooner allows for an early start, which has value in and of itself: process improvements and/or cost reductions will kick in earlier and, maybe even more importantly, parties can jointly learn and adjust where necessary.
- Well, yes, but if your contract is less detailed, will that not increase the risks? And, of course, risks are an essential topic of conversation during the selection process. Not in an attempt to abuse “commercial leverage” to push risk towards the vendor. It is better to engage in a mature conversation among professional parties about who is best positioned to mitigate any of the identified risks. Only as a last resort should risks be translated into financial consequences.
- Well, yes, but what if the vendor engages in the negotiations with an A-team and then positions a B-team after contract signing? There have been cases like that in the past, so apparently, the current way of working cannot prevent that. And maybe it is logical that personal changes occur as the skills for presentation and negotiation differ from what is required for multi-year consistent delivery. However, additional attention to the relationship from the start will decrease the risk that these changes are done in an uncontrolled way that negatively impacts quality.
Agile Sourcing deserves a place in the toolkit
The burden of proof that a suggested change is an improvement lies with those who suggest an alternative approach. At the same time, we should not raise the bar too high. Current practices do not in all cases provide the intended outcome. Norman Martijnse referred earlier in this series to the (Dutch) Adviescollege ICT Toetsing with examples from the Public Sector. And while the private sector is less transparent about setbacks and failures, their track record is not necessarily better.
Based on the experiences with Agile Sourcing in the last couple of years, we see measurable improvements and tangible results. It is not a panacea. Don’t expect all problems to disappear magically in all engagements. Where the scope is dynamic, the outcome is not yet determined, and the context is uncertain, Agile Sourcing tools should be considered seriously. We will require additional iterations, and we will learn from new experiments in this field. But it is already clear that the tools and mindset of Agile Sourcing deserve their place in the toolbox of everyone who engages in sourcing.
1 No majestic plural, but a reference to the people with whom we worked to outline the Agile Sourcing principles. Various tools are available and published under Open Source and you are invited to contribute