Although providers have much to improve, outsourcers also contribute heavily to the dysfunction that plagues managed services relationships. It is neither fair nor realistic to expect a provider to deliver deep contextual understanding if the customer structures the engagement in a way that prevents it. Outsourcing is not a handoff. It is a partnership, and partnerships require involvement, clarity, governance, transparency, and shared accountability. Here are the most important changes customers must make to create an environment where providers can succeed—not just operate.
1. Stop Treating Outsourcing as “Throw It Over the Fence”
Too many organisations treat outsourcing as a way to “offload work” entirely. They expect the provider to magically understand:
- their systems,
- their dependencies,
- their business priorities,
- their historical issues,
- their industry nuances,
- their regulatory concerns,
- their seasonality patterns,
- their internal politics.
This expectation is unrealistic without deliberate effort. Outsourcing does not absolve the customer of responsibility. Instead, it redistributes responsibility. Customers must stop viewing outsourcing as abandonment of ownership. They must shift to shared ownership, where both sides co-own outcomes.
2. Invest in a Proper, Structured, and Ongoing Knowledge Transfer Program
Most KT programs follow this pattern:
- A few rushed sessions
- Documentation handover
- Production access
- Hypercare
- Done
This is insufficient and dangerous. Instead, KT must be:
- Progressive (phased over months)
- Layered (technical + business + operational)
- Scenario-driven (e.g., “What happens during end-of-quarter loads?”)
- Continual (updated quarterly, not only at onboarding)
- Role-specific (L1 learns differently from L3 or architects)
Most importantly, customers must commit their SMEs to consistent availability during the initial months—not occasional, ad-hoc presence. If KT is superficial, expectations become unrealistic, and frustration becomes inevitable.
3. Transparently Share Business Context — Not Just Technical Artefacts
Providers cannot understand what they are never told.
Outsourcers must share:
Business process maps
So providers can recognise impact pathways.
Application value streams
To distinguish high-impact systems from low-priority ones.
Critical business dates
Examples:
- quarter-end,
- year-end operations,
- festive season sales,
- peak trading cycles,
- regulatory deadlines.
Upcoming projects and changes
So providers can plan capacity, staffing, and risk mitigation. Pain points and known issues Openly, not defensively. Providers often operate blind because customers assume they “should already know.” But no provider can understand business processes without the business sharing them.
4. Stabilise the Internal Product Owner / Business Owner Roles
One of the biggest hidden problems in outsourcing engagements is high churn in customer-side roles:
- Product Owners
- Application Owners
- Business SMEs
- IT Service Owners
- Internal Architects
When these roles change frequently, everything resets:
- KT is repeated
- Decisions are re-evaluated
- Expectations shift
- Misalignment increases
- Provider credibility gets reset
Providers cannot deliver stability when customer-side leadership is unstable. Organisations must minimise churn in these roles—or at least ensure structured handovers when churn cannot be avoided.
5. Define Business Impact Models Up Front
Most customers rely on the provider’s severity matrix, which is often generic and infrastructure-focused. Instead, customers must provide:
- a list of critical applications,
- impact ratings for each,
- user groups and transaction patterns,
- revenue/business dependency maps,
- business-acceptable downtime levels.
This enables providers to align prioritization with real-world business consequences.
Example:
A 10-minute outage on a loan origination system during business hours may cost millions. But without explicit business input, it may be treated as a typical P2. Customers must define these models at contract signing—not after escalations.
6. Move Beyond SLA-Only Contracts — Introduce XLAs and OLAs
SLA-only contracts produce mechanical operations. Outsourcers must expand contracts to include:
XLAs (Experience Level Agreements)
Measure user experience, not just uptime.
Examples:
- Login success rates
- Transaction speed
- Number of recurring incidents
- First-contact resolution experience
OLAs (Operational Level Agreements)
Define expectations between internal customer teams and provider teams. Because when internal teams do not meet their obligations, the provider becomes an easy scapegoat. Contracts should structure collaboration, not just compliance.
7. Involve Business Stakeholders in Governance
Most governance meetings happen between:
- Provider operations
- Customer IT operations
But business users, who actually experience the service, remain absent. This results in a massive gap in perception.
Customers must redesign governance:
- Monthly reviews must include business representatives
- Quarterly governance must include product owners
- Major incident reviews must involve real business stakeholders
- Roadmaps should reflect business priorities, not only IT’s list
Providers cannot align with business expectations if the business is never in the room.
8. Share Future Roadmaps and Strategic Intent
Customers often withhold long-term plans until the last moment. This creates:
- capacity issues,
- rushed hiring,
- last-minute changes,
- increased incidents,
- poor planning,
- rushed implementations.
Outsourcers must proactively share:
- architectural direction,
- cloud migration timelines,
- upcoming product launches,
- expansion or consolidation plans,
- new compliance requirements.
Providers need this information to prepare. Surprises are the root cause of escalations.
9. Create a Culture of Transparency, Not Blame
In many organisations, “blame the provider” becomes an easy narrative.
This prevents:
- honest discussions,
- accurate RCA,
- systemic improvement,
- trust building.
Customers must foster a culture where:
- escalations are collaborative, not adversarial
- RCAs focus on systemic fixes, not individual mistakes
- providers are rewarded for surfacing risks early
- transparency is appreciated, not penalised
Psychological safety is essential for high-performance partnerships.
10. Treat Providers as Value Partners, Not Vendors
This is the most important cultural shift.
When providers feel like vendors:
- they operate defensively
- they avoid risk
- they do the minimum required
- they conceal issues
- they act transactionally
When they are treated like strategic partners:
- they innovate
- they take ownership
- they speak openly
- they invest more effort
- they align deeply with the business
Outsourcing relationships mirror the behaviour the customer fosters.
Conclusion: Outsourcing Is a Two-Sided Transformation
For managed services to succeed, the customer must shift from:
- Delegation → Collaboration
- Blame → Transparency
- SLA focus → Experience and Outcome focus
- KT once → Continuous knowledge evolution
- Vendor mindset → Partnership mindset
Providers alone cannot create a business-aligned service model. Outsourcers must create conditions where providers can succeed. When both sides evolve, something powerful happens: Managed services stop being a cost centre and start becoming a value engine.
Cirvesh
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