How to choose between an IT contractor and a partner: differences in cooperation formats, risks, benefits and criteria for selecting an IT team for business

Over the past 25 years, IT departments have come a long way: from departments solely responsible for automation to service departments whose costs are passed on to business units and processes. During this time, we have seen both the rise of IT outsourcing and outstaffing and the creation of technology companies within large groups whose goal is not only to spend the budget, but also to generate profits.

Companies used to work with one or more vendors because the infrastructure was simpler. Today they work with dozens or even hundreds of Contractors. The market continues to experiment with interaction formats, but one thing remains the same: attempts to fit IT into the business strategy and make IT managers partners in the company's development, rather than a service unit.

Many IT contractors position themselves as partners, but few are actually moving from a Contractor to a strategic partner. And not everyone needs it. But those who become partners create value that goes far beyond contractual obligations, helping not only CIOs but also businesses achieve strategic goals.

At KT.team, we put it this way: “A partner is someone an owner can trust. Someone who cares about achieving strategic business goals. This is someone who can make a lasting impact.”

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Where does a business request an IT partnership

Let's take a look at what situations companies find themselves in when working with multiple Contractors.

1. Blurring responsibility. Each Contractor is responsible for its own solution and for its performance. And if the business process covers several integrated systems, then none of the Contractors are responsible for the gray area of interaction between systems. It is often the client's responsibility to bring all Contractors together at one table, understand why the integration stopped working and who should fix it.
2. Loss of focus. Different Contractors are managed by different IT managers and each one is moving in their own direction without having a common vector with the others. And where does IT all go? The CIO and the business have to collect bit by bit.
3. Lack of strategic alignment with business. When a Contractor performs a task, he rarely sees the business picture — what company indicators should be affected by the solution he is implementing. This may lead to the fact that during the trial operation phase, nuances will be discovered that make it difficult to achieve goals. The business thinks the Contractor did a bad job. The contractor, on the other hand, thinks that he is required to make improvements that go beyond the terms of reference.
4. Limited resources. When a company is looking for a contractor for a specific task, it often selects a contractor with narrow expertise in this matter, and, as a result, with limited resources. If a business needs to accelerate to maintain a competitive advantage, the Contractor simply can't do it.

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Of course, all this is special. The main request for an IT partnership was very well formulated by one of our clients:

“I don't want to deal with operational tasks. My job is to set the course and watch the business move along it.”

IT partnership: how to build long-term relationships

The partnership involves deeper cooperation: joint development, sharing roadmaps and data, as well as sharing results and risks. While there may be dozens of Contractors, a partnership involves strategic cooperation, so a partner is usually either one, a so-called IT general contractor, or several, but with clearly delineated areas of responsibility and close cooperation with each other.

A contractor who becomes a partner is someone who understands the business vision and suggests ways to achieve goals together with IT. This is what this means in practice.

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1. Trust. A true partnership is built on trust. It arises over time through the fulfillment of obligations and full transparency in joint work. Partners are ready for open conversations about what works and what doesn't.
2. Common values and culture. For a successful partnership, it is important that the client and partner share a similar mindset and culture. This strengthens relationships not only at the management level, but also between all employees in both organizations.
3. A common understanding with business. The partner does not just take tasks to work, but understands what is behind them. Even if the development strategy so far lives only in the personal notes of managers, the partner must hear, document it and turn it into concrete actions. Here are the words of one of our managers:

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“We had a situation with one of our clients. After listening to the current request, we proposed a solution that almost literally coincided with the idea voiced by the company's owner... a year ago.

At that time, this idea was left undeveloped, not because it was irrelevant, but because there was no one within the team who could pick it up at the same level of abstraction. The owner thought strategically, with a horizon of 10 years, and his team thought strategically for the next year at most.

A year later, we returned to the same wording, but now there were conditions under which it could be implemented. We were able to align ourselves with the business vision and build a plan to achieve the goals we set back then, long before we came along.”

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4. Proactive offers. The partner is proactive. A good partner keeps his finger on the client's pulse and doesn't wait for a request — he offers relevant ideas and solutions himself, keeping track of business needs.
5. Budget management. With a partner, a business can opt out of project budgets. Set a goal, allocate a budget, and the partner will divide it into areas on his side, formulate the necessary results and give a detailed report.

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“I don't want to think about 15 projects. Tell us the amount and tell us where we'll be in six months”, — this is how one of our clients puts it.

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6. Teamwork. This partnership goes beyond a customer-contractor relationship. Together, we form a single cross-organizational team that includes representatives from both sides. The team has a common goal — business development, a unified work rhythm, transparent reporting and the necessary decision-making powers
7. Recruiting people for tasks. The partner does not sell “man-hours” and is not limited to staffing. He selects a team for the tasks and goals of the business. If a partner doesn't have the right specialist, they know how to find one in a short time, whether it's hiring freelancers, partnering with smaller companies, or subcontracting. Once again, a sketch from KT.team's experience:

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Recently, a client asked a seemingly simple question: “How much will the project cost?” I replied: “I can't say until I understand what exactly the team is going to do.” And our team is not a fixed resource. We assemble it for a task, not the other way around.

This was a surprise. He said: “We are used to counting from resources. There are five developers, they're worth five million — that's the budget.”

I explained, “It's different here. We're not limited to the number of people on staff. We have access to the market — we can involve partners, subcontracts, and collect the necessary expertise for a specific request.”

He paused for a while and said, “This is exactly the opposite paradigm. We're not so used to it. That's it, I get it. You go discuss projects. I'm not going to go there anymore. The only thing is that I want to have records.”

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8. Predictability. The partner doesn't wait for reminders, but comes in with updates, discussions, and results.

The partner brings not only technical expertise, but also insights that help connect with the company's internal kitchen and build an effective path to achieving the business goal. Such a partner is able to say no to a project if it does not lead to a result — and this is a sign of interest in success, and not just in getting the next contract.

Contractor vs Partner: Key Differences

Relations with the Contractor do not involve joint work: they clearly define responsibilities and boundaries. A contractor can provide a product or service but is not involved in the client's business. Of course, there are many intermediate formats between these two extremes. In the table, we've broken down the ends of the spectrum so you can understand which projects should be outsourced to a strategic partner and which projects are sufficient for a regular Contractor.

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High level of interaction: the business and the contractor work as a team, jointly searching for optimal ways of development, and not just implementing a ready-made technical assignment.

At the same time, it is important to understand that the partnership format does not affect the closeness of your relations in any way: they can be close and friendly, but not go beyond one-time projects and do not affect the development plans of each of the participants.

Risks and challenges of transitioning to an IT partnership

IT partnership sounds like an obvious path, convenient and effective. But in practice, the transition to this format requires a radically new approach on the part of the client. These are the challenges companies face most often.

Risk 1. No one in the company takes responsibility for the result. Even if the partner is ready to play a leading role, there will be no effect without the client's involvement. Sometimes a company simply does not have a person who is able and willing to take responsibility.

The contractor gets the task, but doesn't get the necessary authority. Each solution requires the participation of the owner, which is why the project slows down and cannot be scaled. Under such conditions, the partnership does not have the expected effect.

Risk 2. The habit of living in the old format. Some companies are not willing to work with a partner as a collaborator. They are more familiar with detailed technical specifications, micromanagement, and control over each line of code.

This approach works on specific, narrow tasks. But it is not suitable when the goal is transformation, scale, growth. When you see your partner as a contractor, the project loses its flexibility.

Risk 3. Interaction problems due to fear of “losing” your zone of influence. Line managers often fear that a partner will take someone's job, move a manager, and automate things that used to require the work of an entire department.

In reality, a strong partner doesn't take it away; he takes care of the routine, giving the team the opportunity to focus on strategy and development.

Risk 4. The illusion of independence. Sometimes companies think it's more reliable to work with 30 contractors at once: “This way we definitely don't depend on anyone.” But in reality, this translates into 30 communication channels, 30 different processes, and 30 motion vectors. The loss of time and focus under such conditions is inevitable.

Partnership does not preclude independence — if you agree in advance on the principles of alienating solutions and integrating knowledge into your team.

What to look for when choosing an IT partner

In the face of constantly changing technologies and increasing requirements for the speed of implementation, choosing an IT partner is becoming a strategic decision. Below are the key features to focus on.

1. Proven experience. Choose a partner with a proven track record and a successful project history. Pay attention to real cases, customer reviews, and specific results that have been achieved.
2. Observing problem-solving. When choosing a partner, you should pay attention not only to technological expertise, but also to the ability to understand the essence of business tasks. A good partner understands what problems the client comes with and knows the pitfalls of solving them. He quickly reads the context, asks the right questions, and offers a future-oriented solution.
3. Flexibility in the work format. The partner must be ready to work at different levels of entry, from a detailed technical specification to an unstructured idea. Sometimes the task is formulated accurately, sometimes it is a direction that needs to be worked out with the business unit. Understanding and accepting this is an important feature of a mature partner.
4. An active position from the very beginning. Pay attention to the partner's behavior even before the start of cooperation. Does he share case studies and results? Does it talk about innovations, does it initiate a dialogue? Does he offer ideas even before a formal request? If there is no involvement and proactivity at the start, then you should not expect it to appear in the process. Activity is not a function of the contract, but part of the team's culture.
5. Coincidence in approaches and language of interaction. Every business has its own way of working: some prefer personal meetings, some prefer clear tables and reports by mail, some prefer presentations, and others prefer a live board with tasks. Discuss with your partner how they plan their work, how they report and synchronize them. Make sure you speak the same language — both literally and professionally.

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Also, pay attention to the first weeks of work: whether the areas of responsibility are clearly delineated, whether restrictions have been taken into account and whether expectations meet. A good partner is ready to discuss business-oriented metrics and take responsibility for achieving them, rather than simply fulfilling technical specifications.

But the most important thing is that you should be comfortable with your future partner. Only when you can say with confidence that you trust your partner's team as much as you trust your internal team can we talk about a strategic partnership that has been built.

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