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The Alliance Model Transforms ICT Services

News  10.03.2022

Can the alliance model utilised in the construction industry work in ICT procurement? Would an alliance make cooperation smoother, more transparent, and more goal-oriented? A-Insinöörit and Elmo are saying yes. For the alliance to work, the involved parties must have courage, trust, and the ability to be completely open.

The unique IT alliance – existing under the name of Anselmo – of A-Insinöörit and ICT company Elmo has been in operation since the spring of 2020. The alliance handles the smoothness and development of the IT department for A-Insinöörit and their organisation of approximately 1,000 employees. The CEO Jyrki Keinänen has previous – and extremely positive – experience from the construction industry, where alliance-based projects have managed to reach their cost and schedule targets. They have also created innovations and provided a good work community and user experience.

– In the old model you are sanctioned for poor performance; in the alliance model you get bonuses for work well done. It is not about ”us and them”, but about doing things together, development, innovation, and taking responsibility, Keinänen sums up the best aspects of an alliance.

With Elmo, shaping an IT alliance was a breeze due to the two companies’ thinking alike. Run by the CEO Janne Aaltonen, Elmo has become a forerunner in discarding the old operational methods and contract models.

– In a nutshell, the problem in both industries, ICT and construction, has been that of a lack of trust: Contracts turn into something unnecessarily burdensome, and the opponent is not fully trusted. Suppliers focus on optimising their products, production chains, and internal processes – not the user experience. This becomes evident in both service quality and customer experience. This has been the norm for so long that people have lost sight of any alternatives, says Aaltonen.

Transforming the customer-supplier model requires a novel way of thinking: the old tendering documentation must be cast aside. So, what Elmo really wants is to shake up the whole ICT industry and change the way services are produced and purchased. Thanks to the alliance carried out with A-Insinöörit, the mission is already well underway.

Doing things the old way and expecting a different result just isn’t happening

Keinänen sees the alliance potentially working in any industry providing that people want to make progress. What does this require from the companies?

– Most of all, unlearning. As such, adopting a new collaborative culture is not difficult: it takes common sense, the ability to talk and listen, and an open mind. Letting go of your old habits is harder and falling back on them is easy when things get challenging. In that kind of situation, bear in mind that doing things the old way means forgetting about better results.

The contract made for Anselmo is a concrete proof of the new thinking model: it is only a few pages long. The alliance contract does not bind the parties for years at a time or aim to cover one’s back. Instead, it openly states what the prices consist of and how to mutually ensure that the services maintain their ability to develop in line with the surrounding world and business operations.

It seems that the alliance model works especially well in ICT outsourcing, although ICT is not a project with a clearly defined beginning and end, stresses Elmo’s customer experience architect, Ville Lammi.

– What is great and awesome today may not necessarily work a year from now. You cannot have a five-year plan with ICT – rather, it is a field you must play proactively. In the world of ICT one or two years already constitute a long-term plan.

What is an ICT alliance?

  • In an alliance, the customer and supplier are equal and work transparently within a shared organisation.
  • The parties agree on common key result areas and reaching these is rewarded. For example, the gains from minor estimates or the losses from major estimates are equally and mutually shared.
  • The parties agree on the shared target levels and success metrics together.
  • Motivation is based on the goals that were set together and an innovation system that rewards people for new, useful ideas is used.
  • All decisions are made together and neither party has right of veto.

 

Article by Jenni Hyry, ICT Elmo Oy’s Head of Marketing and Communications.