Service providers that provide a broad range of products and services offer their customers a flexible set of options for self-management and outsourcing. Such service providers range from large technology manufacturers with services arms to small value-added resellers that provide products and services from their suppliers and internal staff.An example of this approach is the recent announcement that Lloyd's of London has signed a five-year agreement with Unisys to "transform and manage" Lloyd's IT infrastructure. Under a second agreement, Lloyd's has also elected to purchase the vendor's ES7000 servers and infrastructure-consolidation assessment services. As a result, Lloyd's will receive infrastructure improvements and expert skills to design and manage it.In their announcement, the companies focused on the demand for operational efficiencies, reduction of underwriting risks, the challenge of regulatory compliance, and the requirements for Web enablement as the principle drivers for the relationship. System consolidation certainly focused on increased operational efficiencies, but consolidation also reduces the necessary areas of compliance. Introducing new high-end systems also helps with Web enablement, especially when linked to the transformation of the IT infrastructure.Clearly, these approaches can work well. But they can also be problematic.I was reminded of some of the challenges of this approach while working with a small company, which was moving its headquarters to a new facility. As part of the move, the company wanted to migrate to VoIP and voice over Wireless LAN (VoWLAN). The customer decided to use the services of a smaller telecom VAR (which we won't name) that offered products and services to complete the move and technology migration.So far, so good. However, the plans ran into serious snags during the weekend of the move, some of which illustrate what can go wrong with service provider relationships.The customer wanted to switch from services provided by Eschelon Telecom of Minneapolis, Minn., to the VAR, which would provide the customer premise equipment and the management of a relationship with Qwest for outside facilities.The contract required moving Direct Inward Dialing (DID) numbers from the old location to the new, which meant moving them from Eschelon to Qwest, with the VAR acting as the intermediary. Even though both telecom providers had been apprised of the changes for months, and that the experienced VAR was supposed to orchestrate the transfer, the DID lines were not completely changed over until the customer had been in its new digs for two weeks.What should have been a simple transfer of DID numbers turned into a case of finger-pointing, complaints about inexact forms, misunderstandings of fundamental business concepts such as who had the authority to sign agreements for the customer, and a disregard for the cardinal rule of business: the customer is always right.The situation was finally resolved when a procedural mistake led to direct communication between the customer and Eschelon and then to direct communication between Eschelon and Qwest. The issues were resolved within a few hours of that phone communication.This episode reminded me of the value of excellent first line support staff. An Eschelon customer service representative was effective and kept the customer as informed as possible. However, Eschelon's weak internal communications between its customer service and technical staff made resolving issues difficult and mistakes arose. It didn't help that communication between Qwest and Eschelon was veiled and lacked effective feedback to resolve the misunderstandings that were simply resolved once the two parties spoke.This customer's experience, as well as the announcement by Lloyd's of London and Unisys reminded me of the effective use of service providers and outsourcing and the value that they bring to business. I am also reminded, though, of the responsibility placed upon the service providers to remember that the customer really does come first, that the service provider is hired for their expertise, and that the customer should not need to understand the provider's business in order to have excellent results from the relationship. It is a lesson for all of us.