The Value of Trust in IT Sourcing

“Nothing is as fast as the speed of trust… nothing is as profitable as the economics of trust.”
— Stephen M.R. Covey, The Speed of Trust

By many measures, trust is at an all-time low in our society. A wide range of studies show we trust the media, churches, government, some industries and other formerly respected institutions much less than we used to. In business generally,  trust is uncommon. In the relationships between corporate IT groups and their third-party providers, it is very rare indeed.

We think the lack of trust is unfortunate for everyone involved in IT relationships – and not just because trust is a “nice to have” social value. (See our take on the how a lack of trust is one element behind the NFL lockout.) In fact, we think trust is hugely underrated as a “hard-edged economic variable” directly related to flexibility, efficiency and cost – all significant matters for business. As author Stephen M.R. Covey writes in The Speed of Trust.

Contrary to what most people believe, trust is not some soft, illusive quality that you either have or you don’t; rather, trust is a pragmatic, tangible, actionable asset that you can create—much faster than you probably think possible.

On a practical business level, Covey explains, “When trust is low, costs go up and speed comes down.” That’s the “trust tax.” The rising cost and inefficiency of air travel – including new fees and slower security processes – after 9/11 are well known examples. For corporate executives responsible for managing IT relationships, the trust tax takes the form of frequent checking and re-checking of adherence to contract terms, the need to micromanage daily operations and wasted time in meetings to endlessly revisit and modify project plan details. Further, many IT managers may suffer from a constant sense of anxiety that objectives are not being met and problems are not being solved. For senior IT leaders, the most damaging part of the trust tax may be the time taken away from pursuing strategic programs and business-enabling activities.

On the other hand, vendor relationships built on trust offer a “dividend” of greater speed, agility, and return on investment. In its basic form, trust enables IT leaders to have confidence that day-to-day operational metrics are being achieved and, when they’re not, that vendor teams have the appropriate urgency to identify and fix underlying problems. In its maximum form, trust empowers IT leaders to focus on strategic alignment, developing and expanding value-add services, and proactively setting the tone of the relationship. That’s how IT leaders can leverage their sourcing relationships to achieve differentiating outcomes and boost business performance.

In our work with corporate clients, we emphasize trust as a hallmark of effective relationships with IT services providers and software vendors. Of course, many clients ask us how they can cultivate trust when they are so suspicious of vendors. It’s a fair question. In his book, Covey highlights the “cores of credibility” necessary to build trust, as well as 13 behaviors of high-trust leaders. Many of these ideas reflect our own successful experiences in helping our clients build high-trust IT environments and strong relationships with individual vendors. Here are a few favorites from Covey’s books that equate to best practices for building trust in IT relationships:

  • Integrity, intent and capabilities are requirements for trust – the actions of both IT buyers and sellers must reflect their stated goals, and a certain level of competency is assumed.
  • “Talk straight” – clear communication is often an outcome of integrity and can strengthen relationships over the long term, though it may be occasionally uncomfortable in the near term.
  • “Create transparency” and “clarify expectations” – by openly sharing information and establishing clear metrics, everyone has a chance to succeed. For vendors, that means not trying to overwhelm potential buyers with complexity or reams of data, when a few points are all that’s needed. For corporations, that means setting an appropriately high bar and not raising or moving it arbitrarily.
  • “Right wrongs” and “deliver results” – these principles show that performance, quality and responsiveness are important elements in trust; a low performer with outstanding personal character and integrity is still a low performer.

Trust is rare in business today, which means it is more important than ever. We naturally want to do business with companies and people we trust – and those relationships will likely be more productive, collaborative and satisfying if trust is present. That’s how trust may add up to a tangible competitive advantage. So, in seeking to optimize IT relationships, consider how increased trust can be beneficial to all parties. Again, as Covey puts it:

Trust impacts us 24/7, 365 days a year. It undergirds and affects the quality of every relationship, every communication, every work project, every business venture, every effort in which we are engaged.

If trust is not a key criterion in assessing the quality of your IT relationships today, UpperEdge believes you are missing a critical component and a great opportunity to significantly increase the value you deliver back to the business.

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