Can we apply Systems Thinking to Outsourcing?

A glutton for punishment, I’ve just started the second core Open University module on Systems Thinking, and the internal OU forums for the module are starting to wake up with comments on the course material. One comment has directly lead to this posting, namely a thought about the future of vendor relations in IT and whether it is possible to contract for joint social learning.

As I write this, the IT industry is certainly not alone in driving towards operating with varying amounts of outsourced support as our delivery capability gets increasingly federated. My own company has several outsource agreements, and the question asked in the student forum is quite interesting: Can we jointly learn as a collective of commercial entities, and thus jointly resolve situations?

A colleague of mine is of the view that where there is any change then that is evidence of learning. In his model, if I outsource a part of my operation, and a situation arises where we have to somehow get it resolved jointly, then the resulting change shows that we have learned something. Hmmm, yes….but is it a quality learning experience?

But how about we set out to learn jointly, and are we able to do it in a constructive manner? I made a comment about how our biggest outsource is working pretty much in this way, but then a lot of the staff in the outsource worked for us previously so they have our cultural values, and the working relationships in place with our company teams. In other words it’s pretty much business as usual, not that we have built up a way of working.

It’s also fair to say that the outsource model tends to be applied operationally. This is easy to contract, you know what to do & the expectations on you as there are SLAs to report to. The accountants & lawyers can work with this model, if either party fails to do XXX in time Y then you pay, or the lawyers start having an “interesting dialogue”.

Move towards a wider systems & learning context and it becomes harder to give the accountants and lawyers something to get their teeth into: the advantage of a systems approach is that it should be fairer and wider reaching in inquiry terms; also work items spinning off are widely understood by the whole group and therefore should be less contested. In other words in a joint activity (yes, I’ve changed the term “outsource” to “joint activity”) the work that is enabled should be beneficial to all in a context that is shared.

But that means at the beginning of an engagement you may not know what the outcome is likely to be. While that is satisfactory for public sector (within limits of reason of course), in private sector there are many stakeholders who are more familiar with contractual terms (price; SLAs; IP; share equity value) and who, as yet, don’t fully understand the systems engagement model. 

In the field of general aviation (private planes, helicopters and the various other flying machines that those braver than I feel are worth flying) one turning point was when a QC who also happened to be a PPL was elevated to a position whereby influence could be applied to aviation laws. At that time we started to see a lot more realism being applied to Air Law, never the easiest of subjects. (We also had an MP with a PPL, but he got distracted by a cheeky girl of some sort).

I suspect it might be similar if we are to see systems engagement applied to outsourcing, once we get lawyers & commercial financiers who understand what we are trying to achieve, then hopefully the way will be clearer to create the sort of iterative contracts that support systemic engagement between commercial entities. 

So yes, I think applying systems thinking to engagements with outsource agencies makes sense but we’re probably still to early to do it on any large scale. Let’s keep watching how it develops in public sector and see what lessons we can pick up and apply to private sector. Until then we’ll have to keep plugging away.

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