Structured Approach to Implementing and Operating Outsourcing and Managed Services for Suppliers and Outsourcing Organisations

Microsoft PowerPoint - Structured Approach to Implementing and Operating Outsourcing and Managed Services for Suppliers and Out

Structured Approach to Implementing and Operating Outsourcing and Managed Services for Suppliers and Outsourcing Organisations

Alan McSweeney

April 3, 2011 2

Objectives

Describe at a high-level a structured approach to implementing outsourcing/managed services from both

service provider and end-user organisation

April 3, 2011 3

Scope

Provide a high-level view of a common set of processes to be used by service providers and end-user organisations to implement and operate an outsourcing/managed services arrangement

April 3, 2011 4

Topics

Introduction

Overview

Risks and Lessons Learned

Principles of Outsourcing and Core Competencies

Phases of Outsourcing Relationship

Outsourcing for Service Providers


Key Issues For Successful Outsourcing

Key Capabilities and Constituent Practices

Outsourcing for End-User Organisations

Outsourcing Challenges



April 3, 2011 5

What is Outsourcing?

Outsourcing is delegating the responsibility for performing an information technology or business function to a third party

You outsource because the outsourcing supplier will do:

What the organisation currently does

At the same or better level of performance

For the same or lower price

April 3, 2011 6

Potential Advantages of Managed Services

Better Use of Staff: allows agencies to focus human resources on strategic planning and core mission support

Cost Savings: choose not to build and support IT and network infrastructure available in the commercial sector;

use limited capital to purchase needed service levels and reduce total cost of ownership

Ability to Use Optimal Technologies: adjust types and mix of hardware, software, skilled labour, capital investment

and technology to support changes in mission needs

Rapid Response to Organisation and Business Changes: supplier is measured by ability to produce solutions

April 3, 2011 7

Types of Outsourcing Arrangement

Efficiency/Utility (Make it Cheaper) arrangement outsourcing focuses primarily on cost control and, over time, cost reduction, with

the goal of maintaining consistency in the delivery of services

Business Enhancement (Make it Better) arrangement is about business productivity. The organisations performance, as compared

with their competitors, will improve, resulting in movement toward defined business goals

Transformational (Make me Money) arrangement is characterised by a partnership between the service provider and service recipient

that is focused on innovation and new business, changing the very basis on which an organisation competes

April 3, 2011 8

Benefits of Managed Services

Managed Services offers an alternative approach for a client to acquire IT or telecom support services

Managed services solutions are designed and delivered by service providers according to a predefined statement of deliverables and generally includes end-to-end service, service level agreements, and assets (if desired)

A managed service typically includes monthly recurring service-based pricing offering a more predictable cost approach for the client

Ongoing visibility of operational performance is provided and managed through pre-agreed performance parameters (known as service-level agreements)

The client may include their unique performance requirements such as degree of control and visibility, security, availability, capacity, service continuity and other requirements as it relates to

the specific service

Because this is a core competency, the service provider is able to optimise the best balance of facilities, processes, resources, tools, and metrics, resulting in the best overall value for the client

Cost effectiveness is typically achieved through instituting process standards and establishing and supporting a standard operating environment (SOE) consisting of COTS (Commercial Off the Shelf) services and solutions

Managed services can be delivered either in a BOCO (Business-owned, contractor-operated) or COCO (contractor-owned, contractor-operated) model and is largely based on client preference

April 3, 2011 9

Outsourcing Organisations - Developing a Vision for IT Services is Required

What do we do today?

What do our customers want us to do?

What changes do we need to make to align with our customers needs?

How will they pay for those services?

How will we deliver those services consistently and measure their delivery?

What kind of organisation (Governance/Contract Management/Structures/Staff/Skills/Service Providers) will

we need to achieve it?

What service management processes we should use?

April 3, 2011 10

Reasons Organisations Outsource

17%

16%

12%

12%

8%

6%

6%

4%

3%

3%

Reduce And Control Operating

Costs

Improve Company Focus

Gain Access To World-Class

Capabilities

Free Resources For Other

Purposes

Resources Not Available

Internally

Reduce Time To Market

Take Advantage Of

Capabilities

Accelerate Reengineering

Benefits

Share Risks

Function Difficult To Manage

Or Out Of Control

April 3, 2011 11

Outsourcing Experiences

13% to 25% of outsourcing contracts are brought in-house within the first two years

Buyers replace 80% of their service contractors in the first three years

Contractors turn over 40% of their contracts each year, on average

Nearly 70% outsourcing organisations feel their service provider does adequately understand what they are supposed to do

Not good

April 3, 2011 12


Many outsourcing relationships fail, are terminated early, are unsatisfactory to either or both of the service provider and the client

Outsourcing is a business issues and should be treated as such

Many common issues, problems and concerns arise across outsourcing contracts

Learn from the issues to avoid them

April 3, 2011 13

Hidden Costs of Outsourcing

Transfer of knowledge

Processes and procedures

Documentation

Personal knowledge

Quality issues and their resolution

Inspection programmes

Sustaining quality programmes

Cost of rework

Communication

Poor customer service

Daily operational issues

April 3, 2011 14

Cease's Law on the Nature of the Firm

A firm will tend to expand until the cost of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market

This means when it is cheaper to buy the service externally it will generally be bought externally

However there is an assumption of perfect knowledge and perfectly rational use of this knowledge to achieve the most logical solution

In reality this perfection is rarely if ever achieved Other less rational factors affect the decision

Everybody Else Is Doing It I Want To Do It So It Appears On My Resume I Like New Technology Vendors Keep Talking About It I Need One Good Idea To Stamp My Mark On The Organization It Will Solve All My Problems I Hate Dealing With IT I Do Not Want to Setup a Large IT Function

Cost estimates are rarely accurate What we know about most projects is that they either or both overrun on costs and deliver less

than expected Cost overruns are generally caused by a mix of errors in the initial cost estimates and deliberate

distortions in order to cause the decision to be made

April 3, 2011 15

Transaction Costs

Along with production costs, there are costs for preparing, entering into and monitoring the execution of all kinds of contracts as well as costs for implementing allocation and tracking measures for the contracted services

When internal transaction costs become greater than the costs of externally sourcing the service, the service will be obtained externally

There are hidden costs associated with sourcing a service externally Selecting the wrong supplier Costs of writing contract Costs of enforcing contract Having a poor service contract that results in hidden cost and/or reduced service Overlooking personnel issues Loosing control over the outsourced activity Management, quality assurance and supervision overhead Implementation and termination costs Loss of flexibility Loss of integration between applications and data Data extraction costs Security framework implementation

Transition to utility computing model requires full knowledge of costs current and future

Note that anything can be outsourced except the management of what is outsourced

April 3, 2011 16

Outsourcing Planning

Structured approach can form the basis for an outsourcing implementation plan for both service providers and for companies performing outsourcing

April 3, 2011 17

Sample Service Transfer Plan Outsourcing Service Provider

Plan subset

Based on activities

1 Service Transfer

1.1 Resources Transferred In

1.2 Personnel Transferred In

1.3 Service Continuity

April 3, 2011 18

Sample Service Transfer Plan Outsourcing Organisation

Plan subset

Based on activities

1 Outsourcing Opportunity Analysis

1.1 Define Current State

1.2 Outsourcing Criteria

1.3 Demand Identification

1.4 Outsourcing Options

April 3, 2011 19

Where Outsourcing Problems Happen

Inadequate Preparation = Problems Start Here

Flawed Service Provider Selection = Project Failure Starts Here

Unclear Contract = Conflict Begins Here

Wrong Performance Measurement = Management Failure Starts Here

Ineffective Ongoing Management = Service Delivery Problems Start Here

April 3, 2011 20

Risks in Outsourcing Lots of Them

Outsourcing Risks

Strategic Reputation

Compliance Operational

Termination Financial

Country Contract

Access Concentration/Systemic

April 3, 2011 21

Strategic Risks

Outsourcing provider may conduct activities that are inconsistent with the overall strategic goals of the outsourcer

Outsourcer fails to implement appropriate and effective oversight of the outsourcing provider

Outsourcer has inadequate expertise to oversee the outsourcing provider

April 3, 2011 22

Reputational Risks

Outsourcing provider delivers a poor service

Outsourcers customer service does not meet expectations in areas serviced by outsourcing provider

Outsourcing provider practices do not comply with stated practices of outsourcer

April 3, 2011 23

Compliance Risks

Outsourcing provider does not comply with relevant laws and regulations

Outsourcing provider does not comply with consumer laws

Outsourcing provider has inadequate compliance systems and control

April 3, 2011 24

Operational Risks

Outsourcing provider experiences technology failures that impact outsourcer

Outsourcing provider has inadequate financial capacity to fulfil obligations and/or provide remedies in the event of failure or breach

Outsourcing provider experiences fraud or error

Outsourcer experiences difficulties or high costs in undertaking inspections

April 3, 2011 25

Termination Risks

Outsourcer has no exit strategy are not in place because of from over-reliance on one provider or the loss of relevant in-house skills

Ability to return services from outsourcing provider is difficult, time-consuming or costly because of a lack of staff or loss of intellectual capacity

April 3, 2011 26

Financial Risks

Inadequate cost controls and charging mechanism leads to unexpectedly higher costs for outsourcer

Changes to services requested from outsourcing provider are very expensive

April 3, 2011 27

Country Risks

Outsourcer cannot enforce contract

Incorrect selection of applicable legal jurisdiction

April 3, 2011 28

Access Risks

Outsourcing arrangement negatively impacts ability to provide accurate and timely information

There is an additional layer of complexity in understanding activities of the outsourcing provider

April 3, 2011 29

Concentration/Systemic Risks

Concentration of services from multiple outsourcers in small number of outsourcing providers can mean lack of control by individual outsourcer and overall systemic risk

April 3, 2011 30

Lessons Learned from Outsourcing Problems

Smoothly Transferring Services And Resources Common cause of failure is the ineffective management of the transfer of services and

resources to the service provider, leading to service delivery problems

Successful service providers rigorously control the transfer of services and resources to ensure that the new service is able to adequately deliver the service and the service continuity is maintained.

Maintaining Stakeholder Expectations Common source of failure in outsourcing engagements is a difference in expectations

between the client, the service provider and the suppliers and partners

Identifying and managing those expectations helps to ensure a common understanding of what is necessary for success

Translating Implicit And Explicit Needs Into Defined Requirements With Agreed Upon Levels Of Quality

Frequent cause of failure in outsourcing is that the service provider does not fully understand the needs of the client

Successful service providers rigorously gather and analyse the stated and unstated needs, then translate those needs into a set of documented requirements

Successful service providers also recognise that needs change over time and establish provisions for gathering and analysing modifications to their services

April 3, 2011 31


Reviewing Service Design And Deployment To Ensure An Adequate Coverage Of The Clients Requirements

Failure in outsourcing is caused by the service provider not fully addressing the needs of the client

To ensure that the service delivery will meet the clients needs successful engagements include rigorous reviews of the service design and deployment

activities by the clients and the service provider prior to service delivery

Managing Clients Security Managing security and controlling critical data and assets are critical to

establishing trust Security management includes protection of intellectual property,

confidentiality and privacy concerns

Monitoring And Controlling Activities To Consistently Meet The Service Delivery Commitments

Successful service providers rigorously monitor their service delivery activities to ensure that the clients commitments are being met

Actions are taken to resolve and prevent problems, thereby escalating issues as appropriate to ensure that they are addressed in a timely basis

April 3, 2011 32


Monitoring And Managing Clients And End Users Satisfaction Success is not always defined in terms of meeting the agreed upon commitments,

because clients and end users may be unsatisfied even when commitments are being met

Successful outsourcing engagements monitor the satisfaction levels of the stakeholders to identify problems and take action

Managing Employee Satisfaction, Motivation, And Retention IT-enabled outsourcing often involves challenges during transition, deployment and

service delivery

High employee turnover jeopardises the service providers ability to meet its clients requirements and undermines their expected gains and performance levels

Proactively monitoring and managing employee satisfaction and motivation can improve personnel retention and effectiveness

Managing Technological Shifts And Maintaining The Availability, Reliability, Accessibility, And Security Of Technology

Technology is a key component of outsourcing

Major challenges for the service provider include keeping pace with rapid changes in technology and effectively managing the technology infrastructure while changes are incorporated

April 3, 2011 33

Principles of Outsourcing

Need a comprehensive policy to guide the assessment of whether and how activities can be appropriately outsourced

Senior management needs to be responsible for outsourcing policy and related overall responsibility for activities undertaken under the policy

Need to establish a comprehensive outsourcing risk management programme to address the outsourced activities and the relationship with the service provider

Need to ensure that outsourcing arrangements does diminish its ability to fulfil obligations to customers and stakeholders

Need to conduct appropriate due diligence in selecting outsourcing service providers

Outsourcing relationship needs to be governed by contract that clearly describes all material aspects of the outsourcing arrangement, including the rights, responsibilities and expectations of all parties

Need to establish and maintain contingency plans, including a plan for availability and disaster recovery and regular testing of backup arrangements

Need to take appropriate steps to ensure that outsourcing providers protect confidential information from intentional or inadvertent disclosure

Need to be aware of the potential risks posed where the activities of multiple outsourcers entities are concentrated within a small number of outsourcing providers

April 3, 2011 34

Core Competencies for Exploiting Outsourcing and Managed Services for Organisations Selecting Outsourcing

Sourcing having an effective approach to outsourcing

Concerned with managing the IT function like a business

Supplier Management plan, analyse and manage the ongoing relationships with suppliers

Concerned with managing the IT function

April 3, 2011 35

Sourcing and Supplier Management

Supplier Management competence and associated processes operationalises the strategic decisions taken

within the Sourcing competence

Supplier Management Sourcing

April 3, 2011 36

Sourcing

Competence

Supplier Management CompetenceSourcing Competence

Sourcing and Supplier Management

Strategic

Sourcing

Decision

Supplier

Selection

Contracting

Governance and

Partner

Integration

Transition

Supplier

Engagement

Order

Management

(Ordering/

Delivery/

Distribution)

Supplier

Communications

Supplier Risk

Monitoring

Contract

Management

(Payment,

Penalties)

Performance

Measurement

And Monitoring

Supplier

Development

Evaluation

Procurement of IT Services and IT Hardware/Software

April 3, 2011 37

Sourcing Competence

Strategy

Alignment

Objectives

and Scoping

Sourcing

Model

Business Case

Calculation

Organisational

Readiness

Partner

SelectionContracting Transition

Partner

integration

and

Governance

Reevaluation

Planning Cycle

Sourcing Cycle

April 3, 2011 38

Sourcing Competence

Define sourcing strategy and sourcing model

Evaluate outsourcing potential of IT processes

Select optimal partner(s)

Manage the transition to selected partner(s)

Setting the basis for a successful relationship with selected partner(s) to maximise business value contribution

April 3, 2011 39

Sourcing Competence Scope

Strategic sourcing decisions on what processes are in- or outsourced to what extent

The decision on what sourcing model is applied

Internal/external

Onshore/nearshore/offshore

Single vs. multiple vendor relationship

Calculation of business cases for outsourcing projects

The process of selecting the optimal partner(s)

Preparation, negotiation, closing and re-evaluation of contracts with selected partner(s)

Managing the transition process and setting up requirements for an enduring and successful relationship with partner(s)

April 3, 2011 40

Dimensions of Sourcing Competence Measurement Framework

Measure state of Sourcing competence along three dimensions

Sourcing Strategy

Contracting

Sourcing Execution

Define facets of each dimension

Measure each facet in terms of:

Associated processes and their state of development

Scope or extent within the organisation

Sourcing Strategy

Contracting

Sourcing Execution

April 3, 2011 41

Supplier Management Competence

Supplier management is concerned with the execution of the IT supplier strategy and manages the suppliers on an operational basis

Supplier management operationalises the strategic decisions of IT suppliers and contracts agreed in the

Sourcing competence

Effective supplier management provides opportunities for cost reduction from better control of assets and people, as well as value-creation opportunities by supporting IT supplier collaboration and innovation

April 3, 2011 42

Supplier Management Competence Scope

All activities related to managing ongoing (operational) relationship with suppliers and associated systems/ tools

Analysis of existing suppliers to identify suitable ongoing engagement strategies at an individual and portfolio level

Manage supplier relationship in line with evolving IT strategy

Measure and monitor supplier performance from both the organisations own perspective and the suppliers perspective

Manage the ongoing external risks (e.g. supplier insolvency) andongoing internal risks (e.g. unchecked SLAs) derived from the organisations relationships with its suppliers

Long-term development of suppliers, their products and services to help them improve internally to achieve improved levels of innovation, quality and performance, and to be aligned optimallywith the enterprise

April 3, 2011 43

Dimensions of Supplier Management Competence Measurement Framework

Measure state of Supplier Management competence along three dimensions

Supplier Alignment

Relationship Management

Performance And Risk Management

Define facets of each dimension

Measure each facet in terms of:

Associated processes and their state of development

Scope or extent within the organisation

Supplier Alignment


Performance And Risk

Management

April 3, 2011 44


Ongoing

Initiation Delivery CompletionAnalysis

For outsourcing organisation

For both outsourcing organisation and service provider

April 3, 2011 45


Management of outsourcing lifecycleManagement of outsourcing lifecycleOngoing

Close-out the service after the contract ends or the service has been terminated

Close-out the service after the contract ends or the service has been terminated

Completion

Provide service and manage and measure its provision

Provide service and manage and measure its provision

Delivery

Prepare for and transition to provision of service

Prepare for and transition to provision of service

Initiation

Analyse operations and functions to identify those services, processes or functions that could potentially be outsourced and develops the approach to be taken to source the identified opportunities

Analysis

Service ProviderOutsourcing OrganisationPhase

April 3, 2011 46

Roles of Service Provider and Outsourcing Organisation During Phases of Outsourcing Relationship

Initiation

Delivery

Completion

Analysis

Ongoing

Service Provider Outsourcing Organisation

Determine if outsourcing represents a business opportunity

Prepare for service transition, transfer resources and personnel from outsourcing organisation and ensure

service continuity

Plan for outsourcing of selected services, evaluate and select a service provider, create an outsourcing

agreement and transfer resources and personnel to service provider

Define and agree requirements, negotiate contract, plan, design and deploy service, implement service

delivery

Implement the capability to manage the service provider, administer the agreement and the issues,

challenges and changes that arise after the agreement has been reached, reviewing the service providers

performance

Implement knowledge management processes, perform people management, implement

performance management, manage relationship, manage technology and manage risks and threats

Develop outsourcing strategy management, manage relationship with service provider, ensure value,

implement knowledge management processes, manage technology and manage risks and threats

Prepare for service transition, transfer resources and personnel from outsourcing organisation and ensure

service continuity

Plan for completion, ensure service continuity, transfer resources and personnel from outsourcing

organisation and transfer knowledge

April 3, 2011 47

Roles of Service Provider and Outsourcing Organisation During Phases of Outsourcing Relationship

Initiation Delivery CompletionAnalysis Ongoing

Service Provider

Outsourcing Organisation

Common Language

andExpectations

Agreed Roles and

Responsibilities

April 3, 2011 48


Idealised set of steps for a service provider and end-user organisations and outsourcing organisation to perform when taking on a new outsourcing service

Provides a detailed checklist of work to be done

Each practices contains a set of activities and tasks

Can be modified to suit the circumstances: scope of outsourcing, size of service, duration of contract

Can forms the basis of a project plan for elements of outsourcing work such as initiation

Reduces risk of failure

April 3, 2011 49

Key Capabilities Within Outsourcing Lifecycle for Service Providers

Ongoing

Initiation Delivery Completion

People Management

Performance Management


Technology Management

Knowledge Management

Threat Management

ContractingService Design

and Deployment

Service Delivery

Service Transfer

Service Transfer

April 3, 2011 50

Key Capabilities Within Outsourcing Lifecycle for End-User Organisations

Outsourcing Strategy

Management

Governance Management


Value Management


People Management


Outsourcing Agreements

Sourced Services

Management

Outsourcing Completion

Outsourcing Opportunity

Analysis

Ongoing

Initiation Delivery CompletionAnalysis


Organisational Change

Management

Threat Management

Outsourcing Approach

Service Transfer

Service Provider

Evaluation

April 3, 2011 51

Key Capabilities Within Outsourcing Lifecycle for Service Providers and End-User Organisations

Outsourcing Capabilities

and Skills

Analysis Initiation Delivery Ongoing Completion



Service Provider


Service Provider


Service Provider


Service Provider

Outsourcing Opportunity

Analysis

Outsourcing Approach

Service Transfer

Service Transfer

Contracting

Service Design and

Deployment

Service Delivery

Outsourcing Completion

Sourced Services

Management


Service Provider

Evaluation

Outsourcing Agreements

Service Transfer


People Management




Threat Management


Management

Governance Management


Value Management

Organisational Change

Management

People Management



Threat Management

April 3, 2011 52

Key Capabilities and Constituent Practices for Service Providers

Outsourcing Capabilities

and Skills

Initiation/ Completion

Delivery Ongoing

1 Service Transfer

2 Contracting3 Service

Design and Deployment

4 Service Delivery

5 Knowledge Management

6 People Management

7 Performance Management

8 Relationship Management

9 Technology Management

10 Threat Management




1.4 Resources Transferred

Out

1.5 Personnel Transferred

Out

2.1 Negotiations

2.2 Pricing

2.3 Confirm Existing

Conditions

2.4 Market Information

2.5 Plan Negotiations

2.6 Gather Requirements

2.7 Review Requirements

2.8 Respond to Requirements

2.9 Contract Roles

2.10 Create Contracts

2.11 Amend Contracts

3.1 Communicate

Requirements

3.2 Design and Deploy Service

3.3 Plan Design and

Deployment

3.4 Service Specification

3.5 Service Design

3.6 Design Feedback

3.7 Verify Design

3.8 Deploy Service

4.1 Plan Service

Delivery

4.2 Train Clients

4.3 Deliver Service

4.4 Verify Service

Commitments

4.5 Correct Problems

4.6 Prevent Known

Problems

4.7 Service Modifications

4.8 Financial Management

5.1 Share Knowledge

5.2 Provide Required

Information#

5.3 Knowledge System

5.4 Process Assets

5.5 Engagement

Knowledge

5.6 Reuse

5.7 Version and Change

Control

5.8 Resource Consumption

6.1 Encourage Innovation

6.2 Participation

in Decisions

6.3 Work Environment

6.4 Assign Responsibilitie

s

6.5 Define Roles

6.6 Workforce Competencies

6.7 Plan and Deliver

Training

6.8 Plan and Deliver

Training

6.9 Performance

Feedback

6.10 Performance

Feedback

6.11 Rewards

7.1 Engagement

Objectives

7.2 Verify Processes

7.3 Adequate Resources

7.4 Organisational

Objectives

7.5 Review Organisational

Performance

7.6 Make Improvements

7.7 Achieve Organisational

Objectives

7.8 Capability Baselines

7.9 Benchmark

7.10 Prevent Potential

Problems

7.11 Deploy Innovations

1.6 Knowledge Transferred

Out

8.1 Client Interactions

8.2 Select Suppliers and

Partners

8.3 Manage Suppliers and

Partners

8.4 Cultural Fit

8.5 Stakeholder

Information

8.6 Client Relationships

8.7 Supplier and Partner

Relationships

8.8 Value Creation

9.1 Acquire Technology

9.2 Technology Licenses

9.3 Control Technology

9.4 Technology Integration

9.5 Optimise Technology

9.6 Proactively Introduce

Technology

10.1 Risk Management

10.2 Engagement

Risk

10.3 Risk Across

Engagements

10.4 Security

10.5 Intellectual

Property

10.6 Statutory and Regulatory

Compliance

10.7 Disaster Recovery

April 3, 2011 53

Key Capabilities and Constituent Practices for End-User Organisations - 1 Outsourcing Capabilities and

Skills

Analysis Phase Initiation Phase Delivery Phase

1 Outsourcing Opportunity

Analysis

2 Outsourcing Approach

3 Outsourcing Planning

4 Service Provider Evaluation

5 Outsourcing Agreements

6 Service Transfer

Completion Phase

8 Outsourcing Completion

7 Sourced Services Management

1.1 Define Current State

1.2 Outsourcing Criteria

1.3 Demand Identification

1.4 Outsourcing Options

2.1 Outsourcing Approach

2.2 Business Case

2.3 Governance Model

2.4 Impact and Risk Analysis

2.5 Outsourcing Initiation Decision

3.1 Establish Outsourcing

Project

3.2 Service Definition

3.3 Service Provider Selection

Procedures

3.4 Evaluation Criteria

3.5 Prepare Service

Requirements

4.1 Communicate Requirements

4.2 Evaluate Potential Service

Providers

4.3 Select Candidate Service

Providers

5.1 Negotiations Guidelines

5.2 Confirm Existing Conditions

5.3 Negotiations

5.4 Agreement Roles

5.5 Define SLAs and Measures

5.6 Create Agreements

5.7 Amend Agreements

6.1 Service Transition

6.2 Verify Design

6.3 Resources Transferred Out

6.4 Personnel Transferred Out

6.5 Knowledge Transferred Out

7.1 Perform Outsourcing

Management

7.2 Performance Monitoring


7.4 Agreement Management

7.5 Problem and Incident

Monitoring

7.6 Service Delivery Change

Management

7.7 Service Change Management

7.8 Review Service Performance

7.9 Stakeholder Feedback

7.10 Service Value Analysis

7.11 Continuation Decision

8.1 Completion Planning


8.3 Resources Transfer from

Service Provider

8.4 Personnel Transfer from

Service Provider

8.5 Knowledge Transfer from

Service Provider

April 3, 2011 54

Key Capabilities and Constituent Practices for End-User Organisations - 2

Outsourcing Capabilities and

Skills

Ongoing Phase

Governance Focused

Competency and Change

Focused

Environment Focused

9 Outsourcing Strategy

Management

10 Governance Management

11 Relationship Management

12 Value Management

13 Organisational

Change Management

14 People Management

15 Knowledge Management

16 Technology Management

17 Threat Management

9.1 Outsourcing Sponsorship

9.2 Outsourcing Constraints

9.3 Potential Outsourcing

Areas

9.4 Outsourcing Objectives

9.5 Organisational


10.1 Outsourcing

Policy

10.2 Service Provider

Management

10.3 Internal Stakeholder

Management

10.4 Defined Outsourcing

Processes

10.5 Align Strategy and

Architectures

10.6 Business Process

Integration

10.7 Adapt to Business Change


Interactions


Relationships

11.3 Internal Relationships

11.4 Issue Management

11.5 Cultural Fit

11.6 Collaborative

Relationships

11.7 Innovative Relationships

12.1 Organisational

Outsourcing Performance


12.3 Benchmark Outsourcing

Processes

12.4 Improve Outsourcing

Processes

12.5 Innovation

12.6 Business Value and

Impact

12.7 Outsourcing

Alignment

13.1 Prepare for Organisational

Change

13.2 Stakeholder

Involvement

13.3 Define Future State

13.4 Human Resource

Changes

13.5 Communicate

Organisational Changes

13.6 Organisational

Change

14.1 Assign Outsourcing

Responsibilities

14.2 Personnel Competencies

14.3 Organisational

Outsourcing Competency

14.4 Define Roles


Information



15.4 Lessons Learned

15.5 Share Knowledge

16.1 Asset Management

16.2 License Management


17.1 Outsourcing

Risk Management

17.2 Organisational

Risk Management

17.3 Intellectual Property

17.4 Security and Privacy

17.5 Compliance

17.6 Business Continuity

April 3, 2011 55

Analysis Phase

End-User Organisation Concerned with analysing operations and

functions to identify those services, processes, or functions that could potentially be outsourced

Understanding the current, or as-is, state of the client organisations structure and processes

Identifying the relevant criteria for selecting outsourcing opportunities

Identifying outsourcing opportunities to meet outsourcing objectives and criteria

Organising options for outsourcing Developing and validating the Business Case

for each outsourcing option Identifying the outsourcing approach and

governance model for the proposed outsourcing action

Performing impact and risk analyses of the proposed outsourcing action

Making the decision whether or not to source the proposed outsourcing action

April 3, 2011 56

Initiation Phase

Service Provider Concerned with preparation for and initiation of

service delivery Gather requirements Perform due diligence to validate customer

information Assess if and how the requirements can be met Prepare for negotiation Negotiate and sign contract Confirm assumptions Confirm responsibilities and commitments Design the service Review the service design Create service specification Deploy the service Transfer resources - personnel, technology,

infrastructure, applications Transition of service

End-User Organisation Concerned with preparation for and initiation of

managing outsourced services Preparing for service selection by developing the

solicitation and criteria for selection Soliciting and evaluating potential service

providers Preparing for negotiation by having an

organisational position on cost, quality and other topics that need to be negotiated

Defining the formal service level agreements and service provider performance measures

Understanding service providers capabilities by gathering information about the service provider and confirming the assumptions that impact commitments

Establishing a formal agreement with service providers that clearly articulates the clients and service providers responsibilities and commitments

Providing feedback on the service design in order to ensure that the services are meeting the clients requirements and the agreed-upon commitments

Managing the effective transfer of resources needed for service delivery, including personnel, technology infrastructure and work environment

April 3, 2011 57

Delivery Phase

Service Provider Concerned with service delivery including

management of service delivery, verification that commitments are being met and management of costs associated with the service provision

Planning and tracking the service delivery activities

Delivering services according to the agreed commitments

Managing the finances associated with the service delivery

Identifying and controlling modifications to the services being provided

Identifying and controlling modifications to associated service commitments

Identifying problems that impact the service delivery and taking both preventive and corrective actions

End-User Organisation Concerned with monitoring the service

providers service delivery capabilities, including the ongoing monitoring of service provider performance to verify that commitments are being met, monitoring changes, management of the finances and agreements associated with the service provision, fostering realistic expectations and performing value analysis

Planning and tracking the outsourcing management activities

Ensuring that services are delivered according to the agreed-upon commitments


Identifying and controlling modifications to the services being provided or to the associated service commitments

Facilitating problem resolution for problems that impact the service delivery

Reconciling performance against expectations and ensuring that the service provision returns value to the client organisation

April 3, 2011 58

Ongoing Phase

Service Provider Management functions that need to

be performed during the entire outsourcing lifecycle

Manage and motivate personnel to effectively deliver services

Manage relationships with clients, suppliers and business partners

Measure and review the organisations performance and taking action to improve it

Manage information and knowledge systems so that personnel have access to the knowledge needed to effectively perform their work

Identify and control threats to the organisations ability to meet its objectives and client requirements

Manage the technology, systems and applications infrastructure used to support delivery of service

End-User Organisation Management functions that need to

be performed during the entire outsourcing lifecycle




Manage information and knowledge systems so that personnel have access to the knowledge needed to effectively perform their work



April 3, 2011 59

Completion Phase

Service Provider

Concerned with closing down the engagement at the end of the outsourcing lifecycle

Manage the transfer of resources to the new service provider, whether it is to the client or to another service provider

Ensure service continuity during transfer

Identify and transferring the knowledge critical for the delivery of service

End-User Organisation


Planning for closing down a outsourced service and managing the agreement during the close-down period including managing the agreement during termination proceedings, during renewal, or during normal completion

Managing the transfer of resources to the new service provider, whether it is to back to the organisation or to another service provider including the potential transfer of people, technology infrastructure and intellectual property

Ensuring service continuity during the transfer of responsibilities for service provision

Identifying and transferring the knowledge capital critical for the delivery of service

April 3, 2011 60

Benefits of Structured Approach

Service Provider

Minimises problems

Provides common language

Provides common understanding of roles and responsibilities

Provides mechanism for resolving issues

Know what is expected and what should be done

End-User Organisation

Provides structured approach to evaluating and adopting outsourcing

Demonstrates due diligence in selecting outsourcing partner

Provides common understanding of roles and responsibilities

Provides mechanism for resolving issues

Knows service to be provided and measures delivery

April 3, 2011 61

Outsourcing for Service Providers

April 3, 2011 62


Ongoing


April 3, 2011 63


Every outsourcing relationship has four phases

Initiation prepare for and transition to provision of service

Delivery provide service and manage and measure its provision

Completion close-out the service after the contract ends or the service has been terminated

Ongoing management of outsourcing lifecycle

April 3, 2011 64

Initiation Phase

Concerned with preparation for and initiation of service delivery

Gather requirements

Perform due diligence to validate customer information

Assess if and how the requirements can be met

Prepare for negotiation

Negotiate and sign contract

Confirm assumptions

Confirm responsibilities and commitments

Design the service

Review the service design

Create service specification

Deploy the service

Transfer resources - personnel, technology, infrastructure, applications

Transition of service

April 3, 2011 65

Delivery Phase

Concerned with service delivery including management of service delivery, verification that commitments are being met and management of costs associated with the service provision

Planning and tracking the service delivery activities

Delivering services according to the agreed commitments


Identifying and controlling modifications to the services being provided

Identifying and controlling modifications to associated service commitments

Identifying problems that impact the service delivery and takingboth preventive and corrective actions

April 3, 2011 66

Completion Phase


Manage the transfer of resources to the new service provider, whether it is to the client or to another service provider

Ensure service continuity during transfer

Identify and transferring the knowledge critical for the delivery of service

April 3, 2011 67

Ongoing Phase

Management functions that need to be performed during the entire outsourcing lifecycle




Manage information and knowledge systems so that personnel have access to the knowledge needed to effectively perform theirwork



April 3, 2011 68

Key Capabilities Within Outsourcing Lifecycle

Ongoing


People Management





Threat Management

ContractingService Design

and Deployment

Service Delivery

Service Transfer

Service Transfer

April 3, 2011 69

Key Capabilities and Constituent PracticesOutsourcing

Capabilities and Skills


Delivery Ongoing

1 Service Transfer

2 Contracting3 Service Design

and Deployment4 Service

Delivery5 Knowledge

Management6 People

Management7 Performance

Management8 Relationship

Management9 Technology

Management10 Threat

Management






2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles



3.1 Communicate

Requirements


3.3 Plan Design and Deployment


3.5 Service Design

3.6 Design Feedback

3.7 Verify Design

3.8 Deploy Service

4.1 Plan Service Delivery

4.2 Train Clients

4.3 Deliver Service

4.4 Verify Service Commitments


4.6 Prevent Known Problems



5.1 Share Knowledge


Information#


5.4 Process Assets

5.5 Engagement Knowledge

5.6 Reuse

5.7 Version and Change Control



6.2 Participation in Decisions


6.4 Assign Responsibilities

6.5 Define Roles


6.7 Plan and Deliver Training


6.9 Performance Feedback

6.10 Performance

Feedback

6.11 Rewards

7.1 Engagement Objectives



7.4 Organisational

Objectives


Performance



Objectives


7.9 Benchmark


Problems





Partners


Partners

8.4 Cultural Fit

8.5 Stakeholder Information



Relationships

8.8 Value Creation







Technology


10.2 Engagement Risk

10.3 Risk Across Engagements

10.4 Security



Compliance


April 3, 2011 70


Idealised set of steps for a service provider to perform when taking on a new outsourcing client

Provides a detailed checklist of work to be done

Each practice contains a set of activities and tasks

Can be modified to suit the circumstances: scope of outsourcing, size of client, duration of contract

Can forms the basis of a project plan for elements of outsourcing work such as initiation

Reduces risk of failure

Demonstrates professionalism to potential clients

April 3, 2011 71


Many outsourcing relationships fail, are terminated early, are unsatisfactory to either or both of the service provider and the client

Outsourcing is a business issues and should be treated as such

Many common issues, problems and concerns arise across outsourcing contracts

Learn from the issues to avoid them

April 3, 2011 72


1. Establishing and maintaining trust with stakeholders

2. Managing stakeholder expectations

3. Translating implicit and explicit needs into defined requirements with agreed-upon levels of quality

4. Establishing well-defined contracts with stakeholders, including clients, suppliers and partners

5. Reviewing service design and deployment to ensure adequate coverage of the requirements

6. Ensuring the effectiveness of interactions with stakeholders

7. Managing supplier and partner relationships to ensure that commitments are met

8. Ensuring compliance with statutory and regulatory requirements

9. Managing clients security

10. Managing cultural differences between stakeholders

11. Monitoring and controlling activities to consistently meet the service delivery commitments

April 3, 2011 73


12. Monitoring and managing clients and end-users satisfaction

13. Building and maintaining the competencies that enable personnel to effectively perform their roles and responsibilities

14. Managing employee satisfaction, motivation and retention

15. Establishing and maintaining an effective work environment

16. Maintaining a competitive advantage

17. Innovating, building flexibility and increasing responsiveness to meet unique and evolving client requirements

18. Managing rapid technological shifts and maintaining the availability, reliability, accessibility and security of technology

19. Capturing and using knowledge

20. Smoothly transferring services and resources

21. Maintaining continuity of the service delivery

22. Capturing and transferring knowledge gained to the client during contract completion

23. Measuring and analysing the reasons for termination, to prevent reoccurrence

April 3, 2011 74

Issue 1 - Establishing And Maintaining Trust With Stakeholders

Building a trusting relationship with stakeholders is critical to success

Important for all suppliers and partners involved in the outsourcing relationship hardware, software, communications, services

By effectively managing expectations and responding to personnel, clients and end-users, service provider establishes trust with its stakeholders to help establish long-term relationships

April 3, 2011 75

Issue 2 - Managing Stakeholder Expectations

Differences in expectations between the client, the service provider and the suppliers and partners is a common source of failure

Identifying and managing those expectations helps to ensure a common understanding of what is necessary for success

April 3, 2011 76

Issue 3 - Translating Implicit And Explicit Needs Into Defined Requirements With Agreed-Upon Levels Of Quality

Frequent cause of failure in outsourcing is that the service provider does not fully understand the needs of the client

Inability of clients to adequately express their needs

Lack of rigor by the service provider in gathering and analysingthose needs

Successful service providers rigorously gather and analyse the stated and unstated needs

Translate those needs into a set of documented requirements

Successful providers also recognise that needs change over time and establish provisions for gathering and analysing modifications to their services

April 3, 2011 77

Issue 4 - Establishing Well-Defined Contracts With Stakeholders, Including Clients, Suppliers And Partners

Poorly written contracts are a common cause of failure and result in a large number of contracts being renegotiated

Outsourcing arrangements are typically long-term in nature and require contracts that are clear and detailed as well as being flexible enough to account for business changes

Formal mechanisms are required in order for the provider to identify changing needs, modify services based on those changes and amend contracts to reflect the current requirements and commitments

April 3, 2011 78

Issue 5 - Reviewing Service Design And Deployment To Ensure Adequate Coverage Of The Requirements

Failure in outsourcing can be caused by the service provider not fully addressing the needs of the client

To ensure that the service delivery will meet the clients needs, successful engagements include rigorous reviews of the service design and deployment activities by the clients and the service provider prior to service delivery

April 3, 2011 79

Issue 6 - Ensuring The Effectiveness Of Interactions With Stakeholders

Large-scale outsourcing often involves a combination of face-to-face and remote interactions

Interactions with clients need to be managed in order to effectively understand their needs

Clear communications with all stakeholders can have a strong positive impact on the ability to effectively perform work

April 3, 2011 80

Issue 7 - Managing Supplier And Partner Relationships To Ensure That Commitments Are Met

Outsourcing engagements can include multiple service providers working together to meet the clients needs

Regardless of the type of relationship suppliers and partners can have a significant impact on the effectiveness of the service delivery and they must be actively managed

April 3, 2011 81

Issue 8 - Ensuring Compliance With Statutory And Regulatory Requirements

Service providers are often faced with the need to comply with a large variety of laws and regulations

Effectively operating in this environment requires rigorous analysis and management of all applicable legal requirements to protect themselves and their clients

April 3, 2011 82

Issue 9 - Managing Clients Security

Managing security and controlling critical data and assets are critical to establishing trust

Security management includes protection of intellectual property, confidentiality and privacy concerns

Breakdowns, such as security breaches, can impact the service providers ability to provide adequate service and can irreparably damage the relationship with the client

April 3, 2011 83

Issue 10 - Managing Cultural Differences Between Stakeholders

In large-scale outsourcing there are many potential cultural differences between service providers, clients, end-users, suppliers and partners

These include differences between country, region and organisational culture

These differences need to be identified and addressed in order to guard against breakdowns in communication

April 3, 2011 84

Issue 11 - Monitoring And Controlling Activities To Consistently Meet The Service Delivery Commitments

Successful service providers monitor their service delivery activities to ensure that the clients commitments are being met

Actions are taken to resolve and prevent problems, thereby escalating issues as appropriate to ensure that

they are addressed in a timely basis

April 3, 2011 85

Issue 12 - Monitoring And Managing Clients And End-Users Satisfaction

Success is not always defined in terms of meeting the agreed-upon commitments because clients and end-users may be unsatisfied even when commitments are being met

Successful outsourcing engagements monitor the satisfaction levels of the stakeholders to identify problems

and take action

April 3, 2011 86

Issue 13 - Building And Maintaining The Competencies That Enable Personnel To Effectively Perform Their Roles And Responsibilities

Outsourcing is often highly dependant on specialised competencies without which personnel cannot effectively perform the work assigned to them

Service providers need to manage the competencies of individuals as well as the workforce as a whole in order to ensure that work is effectively performed and that the clients requirements are met.

April 3, 2011 87

Issue 14 - Managing Employee Satisfaction, Motivation And Retention

IT-enabled outsourcing often involves challenges during transition and deployment and service delivery

High employee turnover jeopardises the service providers ability to meet its clients requirements and undermines their expected gains and performance levels

Proactively monitoring and managing employee satisfaction and motivation can improve personnel retention and effectiveness

April 3, 2011 88

Issue 15 - Establishing And Maintaining An Effective Work Environment

A work environment that is well suited to the service being delivered enables personnel to effectively perform their work

Also contributes to employee satisfaction and retention

April 3, 2011 89

Issue 16 - Maintaining A Competitive Advantage

Service providers need to effectively demonstrate their capabilities relative to competitors

Initially done to differentiate the service provider from the competition in such a way that they will be chosen over other providers

Done to continually improve the organisations capabilities and demonstrate to clients that the current service provider is the organisation best equipped to meet clientschanging needs

Important aspect of being competitive is demonstrating financial stability and longevity

April 3, 2011 90

Issue 17 - Innovating, Building Flexibility and Increasing Responsiveness To Meet Unique And Evolving Client Requirements

Successful outsourcing engagements are those where the service provider is able to be flexible and responsive to clients changing needs

Adopting innovations is one way to add value and meet new needs

Actively manage the performance of the organisation and continuously improve its capabilities

April 3, 2011 91

Issue 18 - Managing Rapid Technological Shifts And Maintaining The Availability, Reliability, Accessibility And

Security Of Technology

Technology is a key component of IT outsourcing such as public cloud

Challenges for the service provider include keeping pace with rapid changes in technology and effectively managing the technology infrastructure while changes are incorporated

April 3, 2011 92

Issue 19 - Capturing And Using Knowledge

Managing knowledge is critical to a service providers ability to avoid rework and improve the consistency and quality of work performed by personnel

includes the effective storage, retrieval and use of knowledge gained on engagements

April 3, 2011 93

Issue 20 - Smoothly Transferring Services And Resources

A common cause of failure in outsourcing is the ineffective management of the transfer of services and resources to and from the service provider leading to service delivery problems

Successful service providers rigorously control the transfer of services and resources to ensure that the new service provider is able to adequately deliver the service and that service continuity is maintained

April 3, 2011 94

Issue 21 - Maintaining Continuity Of The Service Delivery

Effectiveness of outsourcing is related to the service providers ability to maintain service continuity despite any problems that arise

Successful providers manage service continuity by effectively controlling and preventing problems during

service delivery, preparing and responding to threats and coordinating the transfer of service during periods of transition

April 3, 2011 95

Issue 22 - Capturing And Transferring Knowledge Gained To The Client During Contract Completion

Frequent concern of clients who consider outsourcing is that in-house knowledge will be eroded, making it impossible to bring outsourced services back in-house

Successful service providers address this concern by making provisions for capturing and transferring knowledge back to the client during contract completion

April 3, 2011 96

Issue 23 - Measuring And Analysing The Reasons for Termination to prevent Reoccurrence

Termination may happen for a number of reasons, including an inability of the service provider to meet

changing client needs, resolve problems, meet commitments, or match the capabilities of competitors

Analysing the reasons for termination and taking action based on the findings helps to prevent issues from recurring with other clients and ensure the long-term success of the service provider

April 3, 2011 97

Key Capabilities and Constituent PracticesOutsourcing



Delivery Ongoing

1 Service Transfer



Delivery5 Knowledge

Management6 People




Management10 Threat

Management






2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles



3.1 Communicate

Requirements




3.5 Service Design

3.6 Design Feedback

3.7 Verify Design

3.8 Deploy Service


4.2 Train Clients

4.3 Deliver Service






5.1 Share Knowledge


Information#


5.4 Process Assets


5.6 Reuse







6.5 Define Roles





6.10 Performance

Feedback

6.11 Rewards




7.4 Organisational

Objectives


Performance



Objectives


7.9 Benchmark


Problems





Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 3, 2011 98

1 Service Transfer - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer



Delivery5 Knowledge

Management6 People




Management10 Threat

Management






2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles



3.1 Communicate

Requirements




3.5 Service Design

3.6 Design Feedback

3.7 Verify Design

3.8 Deploy Service


4.2 Train Clients

4.3 Deliver Service






5.1 Share Knowledge


Information#


5.4 Process Assets


5.6 Reuse







6.5 Define Roles





6.10 Performance

Feedback

6.11 Rewards




7.4 Organisational

Objectives


Performance



Objectives


7.9 Benchmark


Problems





Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 3, 2011 99

1 Service Transfer - 1.1 Resources Transferred In

Scope

Establish and implement procedures to verify and account for resources transferred to the organisation

Track and manage resource transfers in order to facilitate a smooth transfer of responsibilities prior to service delivery

Activities

Provide support for creating and maintaining the procedures for verifying and accounting for resources transferred to the organisation

Document and implement the procedures for verifying and accounting for resources transferred to the organisation

Support the implementation of the procedures for verifying and accounting for resources transferred to the organisation

April 3, 2011 100

1 Service Transfer - 1.2 Personnel Transferred In

Scope

Establish and implement procedures to manage the transfer of personnel to the organisation

Transfer the necessary personnel and ensure that the necessary personnel competencies are in place in order to enable the organisation to effectively deliver service

Activities

Provide support for creating and maintaining the procedures for managing the transfer of personnel to the organisation

Document and implement the procedures for managing the transfer of personnel to the organisation

Support the implementation of the procedures for managing the transfer of personnel to the organisation

April 3, 2011 101

1 Service Transfer - 1.3 Service Continuity

Scope

Establish and implement procedures to ensure the continuity of service

Maintain service continuity as service is transferred to the client, or to another service provide, in order to improve client satisfaction

Activities

Provide support for creating and maintaining the procedures for ensuring continuity of service across the organisation

Document and implement the procedures for ensuring continuity of service

Support the implementation of the procedures for ensuring continuity of service across the organisation

April 3, 2011 102

1 Service Transfer - 1.4 Resources Transferred Out

Scope

Establish and implement procedures to transfer resources from the organisation

Manage the transfer of resources in order to help ensure a smooth hand-over and improve the clients satisfaction, thereby establishing a basis for

future relationships with the client

Activities

Provide support for creating and maintaining the procedures for transferring resources from the organisation

Document and implement the procedures for transferring resources from the organisation

Support the implementation of the procedures for transferring resources from the organisation

April 3, 2011 103

1 Service Transfer - 1.5 Personnel Transferred Out

Scope

Establish and implement procedures to manage the transfer of personnel from the organisation

Activities

Provide support for creating and maintaining the procedures for managing the transfer of personnel from the organisation

Document and implement the procedures for managing the transfer of personnel from the organisation

Support the implementation of the procedures for managing the transfer of personnel from the organisation

April 3, 2011 104

1 Service Transfer - 1.6 Knowledge Transferred Out

Scope

Establish and implement procedures to transfer to the client theknowledge gained from the specific client engagement

Activities

Provide support for creating and maintaining the procedures for transferring knowledge to the client

Document and implement the procedures for transferring knowledge to the client

Support the implementation of the procedures for transferring knowledge to the client

April 3, 2011 105

2 Contracting - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer



Delivery5 Knowledge

Management6 People




Management10 Threat

Management






2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles



3.1 Communicate

Requirements




3.5 Service Design

3.6 Design Feedback

3.7 Verify Design

3.8 Deploy Service


4.2 Train Clients

4.3 Deliver Service






5.1 Share Knowledge


Information#


5.4 Process Assets


5.6 Reuse







6.5 Define Roles





6.10 Performance

Feedback

6.11 Rewards




7.4 Organisational

Objectives


Performance



Objectives


7.9 Benchmark


Problems





Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 3, 2011 106

2 Contracting - 2.1 Negotiations

Scope

Establish and implement guidelines for negotiations with currentor prospective clients

Activities

Provide support for creating and maintaining the guidelines for negotiations with current or prospective clients across the organisation

Document and implement the guidelines for negotiations with current or prospective clients

Support the implementation of guidelines for negotiations with current or prospective clients across the organisation

April 3, 2011 107

2 Contracting - 2.2 Pricing

Scope

Establish and implement guidelines for pricing services

Activities

Provide support for creating and maintaining the guidelines for pricing services

Document and implement the guidelines for pricing services

Support the implementation of guidelines for pricing services

April 3, 2011 108

2 Contracting - 2.3 Confirm Existing Conditions

Scope

Establish and implement guidelines for confirming existing conditions about potential engagements

Activities

Provide support for creating and maintaining the guidelines for confirming existing conditions

Document and implement the guidelines for confirming existing conditions

Support the implementation of guidelines for confirming existingconditions

April 3, 2011 109

2 Contracting - 2.4 Market Information

Scope

Analyse and use market information about prospective clients

Activities

Provide support for creating and maintaining the work products and tasks for analysing and using market information about prospective clients

Document and implement the work products and tasks required for analysing and using market information about prospective clients

Support the implementation of analysing and using market information about prospective clients

April 3, 2011 110

2 Contracting - 2.5 Plan Negotiations

Scope

Plan and track negotiations with current or prospective clients

Activities

Provide support for creating and maintaining the work products and tasks for planning and tracking client negotiations

Document and implement the work products and tasks required for planning and tracking client negotiations

Support the implementation of planning and tracking client negotiations

April 3, 2011 111

2 Contracting - 2.6 Gather Requirements

Scope

Establish and implement procedures to gather a clients requirements

Activities

Provide support for creating and maintaining the procedures for gathering requirements

Document and implement the procedures for gathering requirements

Support the implementation of the procedures for gathering requirements

April 3, 2011 112

2 Contracting - 2.7 Review Requirements

Scope

Prior to committing to the prospective client, review requirements and verify that the organisation can meet them

Activities

Provide support for creating and maintaining the work products and tasks for reviewing requirements and verifying that the organisation can meet them

Document and implement the work products and tasks required for reviewing requirements and verifying that the organisation can meet them

Support the implementation of reviewing requirements and verifying that the organisation can meet them

April 3, 2011 113

2 Contracting - 2.8 Respond to Requirements

Scope

Establish and implement procedures to respond to the requirements of a prospective client

Activities

Provide support for creating and maintaining the procedures for responding to requirements

Document and implement the procedures for responding to requirements

Support the implementation of the procedures for responding to requirements

April 3, 2011 114

2 Contracting - 2.9 Contract Roles

Scope

Establish and implement procedures to respond to the requirements of a prospective client

Activities

Provide support for creating and maintaining the procedures for responding to requirements

Document and implement the procedures for responding to requirements

Support the implementation of the procedures for responding to requirements

April 3, 2011 115

2 Contracting - 2.10 Create Contracts

Scope

Define the roles and responsibilities of the organisation and the client with respect to the proposed contract

Consistent and effective legal agreements in order to enable all the parties to have a clear understanding of what services will be delivered and at what level of quality

Given the long-term nature of most outsourcing engagements, implementing procedures for contracts and flexibility in the relationship between the client and the organisation are critical to success

Activities

Provide support for creating and maintaining the work products and tasks for defining the roles and responsibilities of the organisation and client

Document and implement the work products and tasks required for defining the roles and responsibilities of the organisation and client

Support the implementation of defining the roles and responsibilities of the organisation and client

April 3, 2011 116

2 Contracting - 2.11 Amend Contracts

Scope

Establish and implement procedures to amend contracts

Activities

Provide support for creating and maintaining the procedures for amending contracts

Document and implement the procedures for amending contracts

Support the implementation of the procedures for amending contracts

April 3, 2011 117

3 Service Design and Deployment - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer



Delivery5 Knowledge

Management6 People




Management10 Threat

Management






2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles



3.1 Communicate

Requirements




3.5 Service Design

3.6 Design Feedback

3.7 Verify Design

3.8 Deploy Service


4.2 Train Clients

4.3 Deliver Service






5.1 Share Knowledge


Information#


5.4 Process Assets


5.6 Reuse







6.5 Define Roles





6.10 Performance

Feedback

6.11 Rewards




7.4 Organisational

Objectives


Performance



Objectives


7.9 Benchmark


Problems





Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 3, 2011 118

3 Service Design and Deployment - 3.1 Communicate Requirements

Scope

Establish and implement procedures to communicate the clients requirements to the service design and deployment team

Activities

Provide support for creating and maintaining the procedures for communicating requirements

Document and implement the procedures for communicating requirements

Support the implementation of the procedures for communicating requirements

April 3, 2011 119

3 Service Design and Deployment - 3.2 Design and Deploy Service

Scope

Establish and implement procedures to design and deploy the service to meet client requirements

Activities

Provide support for creating and maintaining the procedures for designing and deploying the service across the organisation

Document and implement the procedures for designing and deploying the service

Support the implementation of the procedures for designing and deploying the service across the organisation

April 3, 2011 120

3 Service Design and Deployment - 3.3 Plan Design and Deployment

Scope

Plan and track the design and deployment of the service

Activities

Provide support for creating and maintaining the work products and tasks for planning and tracking the design and deployment ofthe service

Document and implement the work products and tasks required for planning and tracking design and deployment

Support the implementation of planning and tracking the design and deployment of the service

April 3, 2011 121

3 Service Design and Deployment - 3.4 Service Specification

Scope Create the service specification

Create a service specification that clearly, accurately and comprehensively describes the services to be provided in order to effectively meet the clients requirements

Service specification is the basis for designing, deploying and delivering service. It is a comprehensive document that describes the services that the organisat