10 best practices when partnering for strategic skills

Enterprise CIOs have always been at a disadvantage competing with tech firms for skilled IT pros, but accelerated transformation efforts and an AI gold rush have significantly intensified the talent war, prompting CIOs to increasingly turn to outside firms for help.

“Collaboration with external partners allows enterprises to enhance their IT prowess, drive innovation, and bridge skill gaps more effectively amid a swiftly evolving digital landscape,” says Arpita Dwivedi, practice director at Everest Group.

Staff augmentation and outsourcing are nothing new. IT leaders have long relied on third parties for talent, but what’s different is that CIOs are more likely these days to seek partners for highly strategic or niche skills, not just commoditized capabilities as in the past.

“For the more specialized IT needs, there just aren’t enough people to meet the demand,” says Michael Manos, CTO of Dun & Bradstreet. In addition to AI and machine learning, data science, cybersecurity, and other hard-to-find skills, IT leaders are also looking for outside help to accelerate the adoption of DevOps or product-/program-based operating models.

“There’s absolutely an overarching trend we’re witnessing of organizations entering into more strategic partnership agreements to ensure access to critical talent and expertise,” says Greg Sarafin, global managing partner for EY’s partner ecosystem.

But partnering for expertise, experience, and strategic insight demands a different approach than old-school outsourcing. IT leaders must rigorously assess their partners’ talent management and development strategies, build greater trust and transparency into the relationships, and invest in greater partner governance.

A wider world of IT partners

“We are witnessing a paradigm shift where enterprises are not just increasing their number of partnerships but also diversifying the types of partners they work with,” says Harshul Asnani, president of technology, media, and entertainment at Tech Mahindra. 

Such partnerships include long-standing ones such as business consultancies to advise on transformation efforts, software vendors with expertise in vertical or horizontal solutions, system integrators to help design and implement multi-vendor tech stacks, and managed service providers to run and optimize targeted IT domains. But CIOs are also working with niche consultancies and startups for skills in areas such as cybersecurity, AI, cloud, analytics, and DevOps. There are also leveraging crowdsourcing platforms, direct sourcing agencies, and freelance marketplaces, as well as nonprofit programs with expertise in specific areas such as sustainability.

AIOps platforms are one relatively new driver of such partnerships. “These platforms are creating massive upside in developer productivity, but also require new skills and development techniques,” says EY’s Sarafin. “Many of the new skills are in rare supply, as are team leaders experienced in this new development paradigm.”

Some IT leaders say that, by collaborating with specialized providers that implement leading-edge approaches to technology delivery, their own teams are learning new ways of working, effectively upskilling them in the process, says Bill Martorelli, a principal analyst at Forrester.

But finding the niche, high-demand skills needed to drive specific projects can be challenging. In some cases, IT organizations are exploring new partnership models to achieve desired outcomes, such as co-sourced innovation, wherein both parties benefit from the collaboration without relinquishing rights to the intellectual property developed, says Craig Wright, senior partner in the operations excellence practice at West Monroe.

“It’s not just about simple or traditional outsourcing,” says Dun & Bradstreet’s Manos. “We, along with some of our key customers, are building affinity ecosystems to solve and leverage problems together.”

Last June, for example, Dun & Bradstreet launched D&B.AI Labs to co-develop solutions with enterprise IT customers using Dun & Bradstreet’s proprietary data and analytics, generative AI, and large language models (LLMs). “It’s an opportunity to create more efficiencies and solutions by working and developing together,” says Manos. “Our customers are coming to us as a business partner asking for access to these crucial resources and we are doing the same with our customers to find mutually beneficial solutions.”

Still, some CIOs are taking a hybrid approach, for example, by hiring a small number of highly skilled employees to lead the strategic initiatives and then partnering with providers to jump-start capabilities. After all, says Michael Corrigan, CIO of World Insurance, “It can be more challenging to work with, or manage a third-party that is providing higher-end skills like AI/data science if you don’t have the internal IT resources with the knowledge or expertise to hold that third-party accountable.”

IT leaders anticipating a longer-term need for strategic skills may want to supplement efforts to build their own talent pipeline with partners who can provide flexible staffing stopgaps and scalability, such as traditional multi-service providers, boutique firms, or freelance marketplaces, according to Forrester.

“‘Gig platforms’ enable access to a specialized talent pool with rapid scalability and flexibility,” says Everest Group’s Dwivedi. “However, this approach comes with its own sets of challenges such as compliance issues, misaligned workplace culture, and privacy concerns.”

Best practices when partnering for skills

For Manos and the enterprise IT leaders he works with, a primary focus is on increasing the quality of the partnerships, not just the quantity of partners. “Traditional company processes can be implemented to get access to more lower-end skills, but those skillsets truly in demand require looking at your entire ecosystem and creating new kinds of engagements with trusted partners,” he says.

Overarching service partner principles apply here, says Julia Chen, vice president for partner core at AWS — such as clarity around strategy and expectations, established governance mechanisms, and good communication. But partnership for skills requires a more nuanced approach than traditional outsourcing, including the following best practices.

Invest in workforce planning. CIOs must have a handle on their internal capabilities, current and future demands, and the effect of transformational investments on their talent requirements in order to determine what they need to source externally. “When workforce planning is done well, these items will be known and can be easily presented as an overlay of strategic plans, current work demands, and third-party commitments through managed services, statements of work, and other agreements,” says West Monroe’s Wright.

Due diligence pays off. When working with advancing technologies such as AI, screening potential partners can take more effort. “It will be impossible to find a partner that has ten years of experience and references for it,” says AWS’s Chen. “In these cases, it’s important to budget more time finding the right partner, speaking with them, implementing a proof of concept, and staying closer to progress than you would with a partner working on a more mainstream project.”

Select the right partnership model. Jason Carolan, CIO of data center solutions provider Flexential, says deciding on the right model between full-services and staff augmentation is essential. Sometimes, you may want a partner who can work in both capacities. “You [may] want their engineers to be as embedded as possible while maintaining the ability to pivot in and out,” he says. “It’s an interesting combination.”

Dig into talent management details. IT leaders who want a sustainable talent supply chain need to assess potential partners’ talent management and development frameworks. “Ensuring they invest in continuous learning and development is key to maintaining a competitive edge and adapting to emerging technologies,” says Harshul Asnani, president of technology and media business for the Americas at Tech Mahindra. 

World Insurance’s Corrigan advises asking what skillsets, certifications, and personality types they look for when hiring. “Finding out the average tenure for their team members can also give you a lot of insight into the stability, and quality, of the resources you’ll be dependent on within that third-party,” he says.

Seek cultural affinity and ethical alignment. As technology evolves rapidly, ethical alignment also becomes essential. “The complexity escalates when dealing with advanced skills like AI or data science,” says Asnani. “These fields are not just technically demanding but also require a deep understanding of ethical considerations and industry-specific knowledge. Therefore, choosing partners who not only have the technical expertise but also align with your organization’s values and long-term vision is paramount.”

Take a Goldilocks approach. Some IT leaders may think bigger is better when partnering for skills, but that’s not necessarily the case. A primary consideration is how important your business is to the partner, to ensure they’ll be responsive to your needs. “It is important to choose a third-party that is the right size for your organization, and the amount that you plan to spend with them is significant enough for that third-party to treat you with the level of dedication and importance that your organization needs for the engagement to be successful,” World Insurance’s Corrigan says.

Build trust and transparency. Given the strategic importance of these skills, trust and understanding must be built at both the business and individual level. “Share with your partners where you are trying to go so that they have context and can help you achieve your broader vision,” advises AWS’s Chen. Clear communication, well-defined roles, and shared goals are essential to integrating third-party teams seamlessly, adds Tech Mahindra’s Asnani. Dun & Bradstreet’s Manos recommends regular check-ins where key goals, metrics, and objectives are reviewed.

It’s also critical to bring people into the fold at an individual level. “In most cases, it’s best to treat the third party, especially their team members, as an extension of your team,” Corrigan says.

Establish opportunities for bilateral knowledge transfer. The more your partner knows about your business and IT organization, and the more you understand your partner’s ways of working, the better. Everest Group’s Dwivedi suggests advocating for upskilling initiatives and the establishment of joint academies to build niche client-centric expertise within the partner’s workforce. When possible, it can be beneficial to take advantage of the provider’s learning and development infrastructure to transform internal IT teams as well, she says.

Invest in win-wins. To be sustainable, these partnerships must be mutually beneficial. “[These providers] are under the same type of pressures that an enterprise is in the end,” says Forrester’s Martorelli. “Ultimately, they cannot exert total control over their resources and compel people to stay, but in working with them, customers can try to minimize the impact of attrition and even seek creative ways to retain resources by incenting key third-party resources to stick around.”

Double down on vendor management. To manage these relationships, IT organizations need robust vendor management processes, says West Monroe’s Wright. Here, metrics and governance are especially important — as is addressing issues with either promptly. Even as CIOs have been pursuing more partnerships, there has been some growing dissatisfaction with providers’ talent availability and management, says Dwivedi. Thus, integrating service level agreements (SLAs) pertaining to talent attrition and availability into these agreements and adding those to the partner governance process can be beneficial.

“Sourcing and managing critical partnering arrangements is a capability very few companies have at scale today,” says EY’s Sarafin, who argues that companies increasingly dependent on partners to achieve business outcomes should set up a strategic partnership function to better position themselves to capitalize on skills partnerships as inroads to innovation and growth.