Developing the partnership concept

Once the successful service provider has been chosen, the two parties will want to firm up the basis on which they are going to work together. Invariably these days one or other party will raise the subject of a partnership of some type early in the discussions.

It is worth setting down what the partnership concept means in the outsourcing environment where a specific joint venture is not contemplated.

• Both parties accept that a rigid contract would be too restrictive in their future relationship because they want to be flexible enough to maximize the opportunities that appear to exist. In effect they have identified in non-specific terms what they want to achieve but accept that the means of reaching the targets are not yet fully understood and in any case can only be reached over a period of time.

• That does not mean that a contract is not necessary at all. It is important that the original intent of the partnership is written down so that any key relevant individual can refer to it whenever this becomes necessary.

• In fact, a conventional contract is often used for partnership agreements, but is amended in areas that stipulate performance. For example, the service level agreement could still be included as a target to be reached or bettered. In the partnership agreement though, the typical minimum performance level might not be mentioned and could be replaced by a clause that simply urged both parties to do their best to achieve the desired results.

• Usually, a separate document is attached or included in the contract specifying both parties’ responsibilities in achieving the set aims.

• The partnership contract or agreement must spell out the targets that both parties have set whilst allowing flexibility for the provider to try alternative ways of reaching the desired goals.