Tony Westbrook

The news that UK retailing institution Marks & Spencer is looking for a partner to take on a significant part of its business would be interesting enough on its own. But reports suggest that the part of the business in question is its online operation, and that one of the candidates for the job is Amazon, which makes the story fascinating for anyone interested in IT and outsourcing.

That negotiations are in progress with a number of potential partners has already been confirmed by M&S, but it has not yet revealed any names or specifics of who is in the frame or what is on offer.

Anyone with access to a television set or newspaper knows that M&S has had a tough few months of late. There has been a very public battle for control of M&S between its new chief executive Stuart Rose and acquisitive retailer Philip Green, culminating in something not far short of a declaration of war by a frustrated Green.

The online brand is an important part of the M&S business - it's a popular site that gets a lot of traffic. So touting this part of the business as an outsourcing opportunity is a bold move. Some might regard it as a sign of weakness.

But far from that, I'd see it as a very grown up recognition that if there are proven specialists in a technology field, and if the price is right, it makes sense to lean on them to achieve your business objectives. This is the position that M&S is taking, and now it is talking to potential partners and working out the business model. But

I imagine there are some badly bruised egos back at M&S. That is to be expected: it is tough to accept that an outside organisation may be able to do a better job than existing and hard won internal expertise.

But pure online retailers like Amazon have proved that companies with a single, clear mission can overtake multi-faceted competitors in a specific area of expertise.

So why not tap into that experience if the relationship can work to mutual business advantage?

There are a couple of traps to avoid in such a bold outsourcing manoeuvre. First the business one: M&S will need to watch out to ensure that there isn't a conflict of interest now or in the future with its partner. Amazon once had just such a conflict with Toys R Us.

Companies wanting to outsource also need to be aware that a partner like Amazon will eventually come to understand every facet of their online business, including the untapped opportunities.

Second, is there an IT trap? And how should the termination of the contract be managed? If developing the right in-house systems and experience was difficult before, it will be even harder when traffic and revenue is up and internal expertise has been lost.

So in such a situation I'd be looking for a legally binding commitment that the outsourcing partner would not become a competitor, and I would want some very clear transitional arrangements at the end of the contract period to retain necessary knowledge and expertise.

It will be interesting to see how M&S addresses these issues.

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