Good Governance

The goal of good sourcing governance is simple. It is to make explicit the ‘rules of the game’ between the customer and the provider. In other words, good governance makes explicit, ‘who talks with whom, about what and when’. What does this mean? It means there is clarity on authority, accountability, and auditability (transparency). But good governance does not stop there. Good governance ensures that there are no gaps, no holes in the governance framework. Good governance protects against surprises. This is why the comprehensiveness of the governance process set is a critical success factor. Good governance also delivers the capacity to focus on the truly value-adding elements and not the transactional rear-view mirror investment seen today.

Good governance starts in the first week of the sourcing relationship. It must exist in Transition and it must continue throughout the life of the relationship, changing as both the customer and provider needs change.

All three elements of people, processes, and tools have to be right for efficacious sourcing governance. What does this mean?

I have clearly shown you who talks with whom (People), about what (Processes) and when (meeting schedule).

The final revelation is that all the resources must own at least one governance process and the governance processes must in turn be assigned to a governance meeting. This ensures that all the stakeholders actively participate in the governance for the sourcing relationship.

It is this final crucial step that most relationships miss. They leave this to chance, either knowingly or unconsciously, more likely the latter, and as a result the relationship drifts to an unpleasant place. The sourcing business model is a fragile one. As a result it’s most likely outcome is dissatisfaction and failure. Good sourcing governance is the key instrument to avoid this outcome.

What will this achieve? Efficacious sourcing governance will enable a revolution; a revolution which shifts sourcing governance from being a transactional retrospective IT agenda, to a proactive business value enhancing agenda. It will liberate its participants to focus on tomorrow-land. The things needed to insulate and ensure strategic alignment and success of the business.

For more information contact Ernie Zibert at ernie.zibert@gmail.com

Thanks goes to Mohandass Ayyappath for his insightful comments and editing.