Exponential IT brings with it an exciting new world of cutting-edge technology and increasingly accelerated growth of business and IT. But adopting and driving change through this paradigm requires new capabilities to grow impactful and meaningful partnerships with external vendors who can help implement technologies like artificial intelligence and virtual reality.

Building outcome-based partnerships involves working very closely with vendors who, in many cases, will have just as much to lose as the organizations implementing these new technologies. This requires a greater degree of trust between parties than a standard vendor relationship. It also drastically increases the risks to both organizations; as each loses some control over data and outcomes, they must trust that the other organization will follow through on commitments and obligations.

Outcome-based partnerships build upon traditional vendor management practices and create the potential for organizations to embrace emerging technology in new ways.

Kim Osborne Rodriguez
Research Director, CIO Advisory
Info-Tech Research Group

Implementing exponential IT will require businesses to work with external vendors to facilitate the rapid adoption of cutting-edge technologies such as generative artificial intelligence. IT leaders must:

• Build strategic relationships with external entities to support the autonomization of the enterprise.
• Procure, operate, and manage contracts and performance in outcome-based relationships.
• Build relationships with new vendors.

These challenges require new skills which build trust and collaboration with vendors.

Traditional vendor management approaches are still important for organizations to develop and maintain. But exponential relationships bring new challenges:

• A shift from managing technology service agreements to managing business capability agreements
• Increased vendor access to intellectual property, confidential information, and customers

IT leaders must adapt traditional vendor management capabilities to successfully lead this change.

Outcome-based relationships should not be undertaken lightly as they can significantly impact the risk profile of the organization. Use this research to:

• Assess your foundational vendor management capabilities as well as the transformative capabilities you need to manage outcome-based relationships.
• Identify where you need to build your capabilities in order to successfully manage relationships.
• Successfully manage outcomes, financials, risk, and relationships in complex vendor partnerships.

Exponential value relationships will help drive exponential IT and autonomization of the enterprise.