The document details a case study on a long-standing and underperforming strategic outsourcing relationship between a partner and IBM, emphasizing the need for a structured partnering program due to low client satisfaction and operational performance. Following various surveys and interviews, a joint leadership team initiated several improvement initiatives to enhance relationship health, including a collaborative culture and communication plans. By 2010, perceptions regarding the partnership had shifted positively, indicating improvements in trust, mutual benefits, and overall relationship effectiveness.

1. Partnering RelationshipsCase Study10 January 2011

2. Table of ContentsBackground and contextDiagnosisThe Partnering JourneyFollow up health checkRealising the valueReferences219/01/2011

3. The relationship was a long-standing one, but mired in under- performanceBackgroundRelationship began as a strategic outsourcing deal to outsource IT Operations to IBMSeen as ground breaking at the time of the deal more than 10 years agoIBM took in a large number of partner staff and over time strongly inculcated them with the IBM culture and valuesThere was no formal or structured partnering relationship development activities prior to this intervention, although there had been numerous discussionsThere had been numerous changes to the senior management and leaders of both partnersOperational performance had consistently failed to meet SLAs and client satisfaction had consistently been low3Recent StatusTurnover of partner leader and management team – only 1 with more than 12 months experience in current role

4. Turnover of IBM leader and management team – few with any length of experience

5. Contract was coming up for renewal

6. Client satisfaction was low

7. Operational performance was poor, with SLAs routinely missed

8. Disruptions caused business losses and customer service issues for partner

9. Contract was financially poor for IBM

10. IBM staff satisfaction was very low, with issues of health and retention

11. A large IT transformation program was underway with business-critical deadlines19/01/2011

12. It was decided to initiate a partnering program commencing with a survey and executive interviewsThe IBM Leader had previous experience with IBM’s Relationship Alignment Method and was a strong advocate – also funding the programThere was joint sponsorship, with each partner committing a senior resource to drive the program4Joint Leadership Team Kick-off meetingPartner teams execute plansAlignment WorkshopSummary ReportConduct InterviewsLock in sponsorshipPrepare Alignment WorkshopConsolidate actions

13. Prepare plan

14. Define measuresPulse SurveyAnalyse data19/01/2011

15. The IBM Relationship Pulse Survey was used to ensure reliability and validity5The survey consists of 38 questions (plus demographic questions) organised around the six determinants of effective partnering

16. There was provision for free text comments in each section

17. The response design was forced choice, i.e. there was no neutral option19/01/2011

18. There was an extensive range of data captured and analysed – executive interviews, surveys and comments6The response rate to the survey was high – just over 75%

19. About half of those who responded also provided comments

20. People had something to say and wanted to say it !

21. The detailed report ran to 55 pages

22. An Executive Summary was used to brief the leadership team

23. Other versions were prepared for specific audiences19/01/2011

24. 7Overall Partner and IBM staff have a consistent negative perception of the relationship health1. Mutual Benefits2. Commitment3. Mindset4. Shared Knowledge5. Complementary Competencies6. Linkagen = 122Responses of 1, 2 or 3 were negative. Responses of 4, 5 or 6 were positive. The neutral point is 3.5.19/01/2011

25. 8Things senior managers are most negative about…- ’ve+ ’ve1234561.61Q3.1The term “trust” characterises this relationship well.1.79Q 1.2Both Partner and IBM share fairly the risks and rewards.1.94Q 4.4Partner and IBM management and operating styles are widely compatible.Q 6.31.94Both orgs are linked through effective and efficient processes that support the relationship purpose and… Q 1.11.95The business relationship is creating the value expected by both Partner and IBM.Q 2.52.00Changes to the business agreement (contract) are routinely and fairly implemented without undue stress.2.06Q4.7Communication between both organisations is open and effective.n = 1919/01/2011

26. 9Both sets of senior managers are strongly negative about achieving the strategic intent of the relationship - ’ve+ ’veComments Related to Intent“I feel that the relationship between the IBM and Partner is not one of partnership, but one of body shopping and very little value add.” IBM Senior Mgr

27. “IBM are doing the basic tasks to deliver the contract. IBM should be trusted partners / advisors but are performing like paid suppliers with a basic low cost contract.” Partner Senior Mgr

28. “IBM acts to demonstrate that IBM success is more important than, and separate from, Partner’s expectations from the business relationship.” Partner Manager

29. “A 'Partnership' requires trust and a mindset/attitude/behaviour which supports the 'Partnership' model. The current mindset/attitude on the Partner/IBM relationship is one of Master/Slave.” IBM Mgr

30. “Individuals from both organisations have grown into an us and them mentality which is difficult to break down. The ongoing lack of an effective working relationship has eroded what trust has existed in the past to the point that many people are planning for failure of the relationship.” Partner Senior Mgrn = 19n = 7- ’ve+ ’ve19/01/2011