In a recent Computerworld article, EquaTerra highlighted its "Speed Sourcing" concept - an accelerated process to complete outsourcing deals. The practice, whereby the entire procurement and negotiation process is compressed - with key features eliminated - promises faster time-to-savings, a critical factor in these difficult times.

However, the practice has a number of apparent faults - none of which were highlighted by the article. EquaTerra also fails to recognize the reasons why outsourcing procurement cycles are so long to begin with, including the process discipline instilled by corporate procurement departments, a clear need for thoroughly fleshed-out agreements, and the importance of retaining deal-making leverage throughout the deal making process.

That is not to say that efficiencies in the deal-making process cannot be found and exploited. However, I believe that the approach proffered by EquaTerra "throws the baby out with the bath water," and creates deal risks that exceed the benefits offered by this concept.

First, it is important to remember that deal cycles have increased in a large part due to the competitive bidding process required by corporate procurement departments. Sure, these can be frustrating and bureaucratic, however they also do instill a large amount of discipline into the deal-making process. And anyone who has seen a "favorite son" selection process - where an executive chooses a vendor for "personal" reasons - will recognize the value of this discipline. The procurement process also allows the company time to socialize the decision-making process, leaving the deal less open to further internal criticism.

Second, EquaTerra short-circuits the deal process, calling for "general" agreements instead of detailed SOWs and risk-sharing. No doubt, SOWs can get too detailed, and can be a major bog-down point for outsourcing agreements, but I believe a more nuanced approach would be better. For example, instead of detailing every responsibility down to the "fine print," it may be sufficient to, in the main, thoroughly draw the responsibility borders between the company and supplier, providing thorough guidance to both parties without the need to detail every step of every process.

Finally, EquaTerra's process ignores the simple fact that the customer looses much of its leverage once vendor selection is complete. Upon selection, it becomes strategically in the supplier's benefit to "give less" during negotiations. At that point, the supplier knows, with relative certainty, that the deal will be done and it will get the business, and that failing to close will create more "face loosing" on the customer side. Keeping multiple suppliers in the deal process - as legitimate bidders - as long as possible can prevent this shift of strategic advantage. Counterintuitively, it may be more efficient to negotiate with two vendors fairly completely prior to final selection - doing so can instill within the supplier community the need for process discipline.

So why is the dealmaking process so inefficient? Where can efficiencies be found within the process? First, while submitting the bid to one supplier, as suggested by EquaTerra, is troublesome, so is submitting the bid to ten suppliers. Instead, I would suggest strategically offering the RFP to no more than four suppliers, including a couple of broad "industry leaders" and a couple of "specialty" suppliers. This limits the amount of information necessary to review prior to initial down-selection. By including specialty suppliers, companies can leave open the ability to find greater value through specific expertise.

Second, it is important to create a clear decision-making team and make sure that they have the time and skills necessary to quickly move through the process. Frankly, coordinating schedules can be one of the key issues that slow down the deal-making process. This problem can be reduced or eliminated by assigning and dedicated cross-functional team to the project, and by providing them with management support to complete the process efficiently.

Third, get the lawyers talking early. A lot of the issues in the boilerplate can be addressed without the entire team in the room (and yes, I have done this successfully in a billion-dollar, multi-vendor procurement). Without the need for "legal theatre," the legal process can finish 80% of the deal quickly and efficiently, usually before the services are defined completely. In this instance, a strategic use of additional legal resources can reduce the overall transaction cost of the deal.

Frankly, there is no reason that an accelerated, multi-supplier procurement effort cannot be completed within 60-120 days - from RFP to signature. It just requires a management commitment, reasonable requirements, foresight, and a "well oiled" customer machine. While I understand frustration that corporate bureaucracy can create, particularly for IT managers used to immediate turnaround, and can see the attractiveness of the "solution" proposed by EquaTerra, I believe that "speed sourcing" represents a step backwards when it comes to the critical need to maintain organizational integration around fundamental business decisions.

Even in tough times - no - especially in tough times, that old adage "haste makes waste" continues to ring true.