The Early 1980s saw a raft of huge IT service contracts that became the blue print for the business world.

Today, however, enterprises want access to a wide range of outsourcing options to reflect emerging and increasingly unique requirements. A single supplier offers convenience and straightforward governance but, in many cases, growing business complexity dema-nds ever focused and diverse expertise.

The approach reflects Forrester Research’s view of IT and communications as "di-stinct islands" that require discrete management and integration expertise.

In response, the modern trend of multi-sourcing has emerged as enterprises look to source a ‘dream team’ of specialists. The approach, unsurprisingly, is no miracle cure. The expertise mi-ght be right but governance issues have, on occasions, seen many hands rapidly degenerate into many more pointing fingers when problems occur.

Enterprises have embra-ced multi-sourcing to deliver innovation for significant service improvements and reduce overall risk exposure at a competitive cost. On paper, at least, renegotiating a contract with one supplier with a 10 per cent failure rate is more challenging than replacing 10 per cent of a supplier matrix.

However, the issue of co-mplexity — this time in a managerial guise — rema-ins the enterprise challenge. Professor Phanish Puranam of London Business School succinctly encapsulates the good and bad sides of sourcing and deploying new layers of expertise.

He said: "Using multiple vendors can create competition and lowers the risk of delivery failures, escalating fees and inflexible services. However, this approach al-so creates enormous co-ordination complexity for the client and for the vendors themselves. How do you get multiple vendors to deliver a seamless integrated service? How easy is it to switch to another vendor when one vendor does not perform? Who is ultimately accountable?"

It’s not unknown for enterprises to incur costs from vendors who, for reasons that include inexperience or cultural differences, fail to work together as planned. Multi-sourcing without effective governance can be painful.

An Orbys Consulting survey confirmed that some firms have struggled to manage multiple IT outsourcing relationships. Apparently, in the United Kingdom alone, 41 per cent of large companies had no formal multi-sourcing fra-mework in place to define the interfaces between different suppliers. This is a worrying statistic for IT firms that want to outsource some fun-ctions with peace of mind.

What we’re seeing today are initiatives that help customers deal with both technical and managerial complexity. Vendors have, over the past five years, remembered the golden rule of outsourcing — make it easier for customers to focus on their core offering.

The changing enterprise mindset has provoked a res-ponse. The industry has worked hard to ensure that modern outsourcing appro-aches take care of both the technical and governance challenge. Management tea-ms realised customers wanted single source governance standards with multi-source expertise.

So began the process of competitive collaboration. Enterprises now have the option of working with suppliers who are committed to working together to remove complexity and risk from their business.

A modern business practice collaboration has rapidly emerged as a modern business zeitgeist promising major benefits from mutual trust and innovation. Such a shift in business behaviour, as Tapscott and Williams wrote in their seminal book Wikinomics, affects "every aspect of management". Outsourcing is no exception.

To ensure workable governance structures, enterprises need to know that suppliers are committed to one another through legally binding management proce-sses. A journey taken with a hastily constructed patchwork of suppliers simply doesn’t come with the same promise of solidarity.

The issue of trust is crucial. Suppliers must earn trust through mutual commitments.

Suppliers with evidence of collaborative commitments have already taken tangible steps to deal with enterprise risk. The approach gives clear governance guidelines that can be analysed before a deal is signed giving the enterprise a clear idea on how the deal will unfold.

IT and networking provi-ders have converged and, in the future, both will move towards the applications sp-ace but stop short of applications development and maintenance. The customer will demand steps are taken to enshrine business performance in service-level agreements and the outsourcing mix will become even more complex.

Nobody can blame enterprises for wanting to pass on complexity and risk. They must, however, realise that the risk does not disappear.

If suppliers are ill-equipped to manage to manage the issues collectively it will one day come back to haunt them and proof of collaboration is an essential starting point for any project.

The author is the chairman of British Telecom (India) and a member of Nasscom’s executive

council

Arun Seth