"It's all about the relationship." You'll hear this from just about every presenter at outsourcing conferences these days. Everyone agrees that the quality of the buyer/provider working relationship makes all the difference between a relationship that fails miserably and one that achieves its intended value.

During this transient economic climate, companies must ensure their capability to deliver "on time and within budget" to make shareholders feel confident of the continuing performance improvement (i.e., quarterly published financial results) of their companies. Thus, choosing the right sourcing partner or partners is critical. Decision makers must consider the following questions:

Companies and their suppliers interact daily about a variety of issues, including logistics, product specs, pricing, lead times, change orders, and so on. This exchange of information often occurs between numerous individuals across multiple functions and business units, making coordination of communication and decision making both difficult and critical.

This article examines data from a Cutter Consortium survey of 140 organizations that have made outsourcing a part of their IT strategy.

Most buyers and providers in outsourcing today recognize that the relationship matters. It affects whether buyers get the decreased costs, improved service, or transformed business processes they are looking for; and it affects whether providers achieve their margins, retain and grow scope, and win new business on the strength of their reputation and satisfied customers. In a 2004 Cutter Consortium survey, more than 80% of respondents stated that at least 30% of annual contract value hinges on the quality of the working relationship.

Various publications' recent reports on the successes and failures of outsourcing engagements suggest that our industry still has room for improvement. A 2004 Cutter Consortium survey indicates that we remain dissatisfied with our outsourcing services. Considering the myriad articles, research, and white papers covering various outsourcing experiences, you have to wonder what's left to be learned. We know that the decision to outsource should be driven by a reasonably sound and well-thought-out business case.

Cutter Fellow Jim Highsmith (of agile development fame) and I have been friends and colleagues since the 1980s. Though our careers have gone in different directions recently, our interests have begun to converge again around his passion for agile development and my passion for project architecture.

The other day, I was chatting with Cutter Fellow Ken Orr, who asked a very good question: "If object and component reuse didn't work, why is service reuse going to be any different?" Since service reuse is key to getting the value out of a service-oriented architecture (SOA), this is an important issue.