Outsourcing And Cloud Computing

Implementing Outsourcing Effectively Within the Context of Cloud Computing (And More Generally)

Alan McSweeney

April 5, 2010 2

Objectives

• Describe a structured approach to implementing outsourcing from both service provider and end-user organisation perspective in the context of cloud computing (and more generally)

April 5, 2010 3

Agenda

• Introduction

• Outsourcing for Service Providers

• Outsourcing for End-User Organisations

April 5, 2010 4

Introduction

April 5, 2010 5

Scope

• In the context of cloud computing, the scope of this material is related to Public Cloud, a shared infrastructure, elements of which may or may not be dedicated, located away from the organisation’s premises accessible to other organisations and with multiple tenants

• Moving systems/applications/data to a service provider, in whatever format, constitutes outsourcing/managed service− IaaS - Infrastructure as a Service

− PaaS - Platform as a Service

− SaaS - Software as a Service

− STaaS - Storage as a Service

− BRaaS - Backup and recovery as a Service

• The business relationship needs to be managed as an outsourcing/managed services arrangement

• Failure to do so will lead to problems

• Cloud computing is not just a technology arrangement – it is a business services relationship

• Do not ignore or underestimate the business nature of the relationship

April 5, 2010 6

Types of Outsourcing and Types of Cloud-Based Services

• Rough classification of types of public cloud-based services and types of outsourcing/managed services

BRaaS (Backup and recovery as a Service)

STaaS (Storage as a Service)

SaaS (Software as a Service)

PaaS (Platform as a Service)

IaaS (Infrastructure as a Service)

Infrastructure Managed Services

Network Managed Services

Application Service Provider (ASP)

Knowledge Process Outsourcing (KPO)

Business Process Outsourcing (BPO)

April 5, 2010 7

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 5, 2010 8

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 5, 2010 9

Scope

• Not concerned with the advantages, disadvantages, merits, demerits, rights, wrongs of outsourcing

• Concerned with outlining a structure that will enable you to get the relationship right, either as a service provider or an end-user

• Describe a generalised approach that can be modified to suit requirements of type of outsourcing and of both service providers and client organisations

• Migrating applications to a public/virtual private cloud no different from any other outsourcing arrangement

• Non-technology issues – people, process and management -dominate

• No reason to believe that public cloud implementation will be different from that of other outsourcing experiences

April 5, 2010 10

Scope

• Not exclusively concerned with public cloud-based services as outsourcing

−General notes on all forms of outsourcing

• Provide a common language for outsourcing organisations and service providers

• Provide a common understanding of roles, responsibilities to increase the chances of a successful relationship

April 5, 2010 11

Outsourcing Planning

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

April 5, 2010 12

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 5, 2010 13

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 5, 2010 14

Where Outsourcing Problems Happen

• Inadequate Preparation = Savings 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 5, 2010 15

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 5, 2010 16


• Reviewing Service Design And Deployment To Ensure An Adequate Coverage Of The Client’s 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 client’s 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 Client’s 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 client’s 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 5, 2010 17


• Monitoring And Managing Client’s And End User’s 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 provider’s ability to meet its client’s 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 5, 2010 18

Outsourcing/Managed Services Does Have Advantages

• Better use of personnel allows organisations to focus human resources on core services

• Cost savings by not building and supporting IT and network infrastructure and using capital to purchase needed service levels and reduce total cost of ownership

• Ability to use most appropriate technologies

• Enables faster response to changes as the supplier is measured by ability to produce solutions

• But it must be defined as you cannot achieve what has not been defined

• Provision of managed service must be based on trust and common goals

April 5, 2010 19

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

• Is there any reason to believe these experiences will not be replicated by public cloud-based services and implementations?

April 5, 2010 20

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 5, 2010 21

Outsourcing for Service Providers

April 5, 2010 22

Phases of Outsourcing Relationship

Ongoing

Initiation Delivery Completion

April 5, 2010 23


• 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 5, 2010 24

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 5, 2010 25

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

−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 takingboth preventive and corrective actions

April 5, 2010 26

Completion Phase

• 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

April 5, 2010 27

Ongoing Phase

• 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 organisation’s performance and taking action to improve it

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

− Identify and control threats to the organisation’s ability to meet its objectives and client requirements

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

April 5, 2010 28

Key Capabilities Within Outsourcing Lifecycle

Ongoing

Initiation Delivery Completion

People Management

Performance Management

Relationship Management

Technology Management

Knowledge Management

Threat Management

ContractingService Design

and Deployment

Service Delivery

Service Transfer

Service Transfer

April 5, 2010 29

Key Capabilities and Constituent PracticesOutsourcing

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

1.1 Resources Transferred In

1.2 Personnel Transferred In

1.3 Service Continuity

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 Responsibilities

6.5 Define Roles

6.6 Workforce Competencies

6.7 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 5, 2010 30

Key Capabilities and Constituent Practices

• 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 practices 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 5, 2010 31

Key Issues For Successful Outsourcing

• 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 5, 2010 32


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 5, 2010 33


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 5, 2010 34

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 5, 2010 35

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 5, 2010 36

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 5, 2010 37

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 5, 2010 38

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 client’s 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 5, 2010 39

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 5, 2010 40

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 client’s 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 5, 2010 41

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 5, 2010 42

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 provider’s ability to provide adequate service and can irreparably damage the relationship with the client

April 5, 2010 43

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 5, 2010 44

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 client’s 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 5, 2010 45

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 5, 2010 46

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 client’s requirements are met.

April 5, 2010 47

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 provider’s 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 5, 2010 48

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 5, 2010 49

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 organisation’s capabilities and demonstrate to clients that the current service provider is the organisation best equipped to meet clients’changing needs

• Important aspect of being competitive is demonstrating financial stability and longevity

April 5, 2010 50

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 5, 2010 51

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 5, 2010 52

Issue 19 - Capturing And Using Knowledge

• Managing knowledge is critical to a service provider’s 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 5, 2010 53

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 5, 2010 54

Issue 21 - Maintaining Continuity Of The Service Delivery

• Effectiveness of outsourcing is related to the service provider’s 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 5, 2010 55

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 5, 2010 56

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 5, 2010 57

Key Capabilities and Constituent PracticesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 58

1 Service Transfer - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 59

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 5, 2010 60

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 5, 2010 61

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 5, 2010 62

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 client’s 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 5, 2010 63

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 5, 2010 64

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 5, 2010 65

2 Contracting - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 66

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 5, 2010 67

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 5, 2010 68

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 5, 2010 69

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 5, 2010 70

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 5, 2010 71

2 Contracting - 2.6 Gather Requirements

• Scope

− Establish and implement procedures to gather a client’s 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 5, 2010 72

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 5, 2010 73

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 5, 2010 74

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 5, 2010 75

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 5, 2010 76

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 5, 2010 77

3 Service Design and Deployment - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 78

3 Service Design and Deployment - 3.1 Communicate Requirements

• Scope

− Establish and implement procedures to communicate the client’s 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 5, 2010 79

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 5, 2010 80

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 5, 2010 81

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 client’s requirements

• Service specification is the basis for designing, deploying and delivering service. It is a comprehensive document that describes the services that the organisation provides to the client and describes how end-users request services

• Describes the available services, the agreed-upon service levels, if any and the interfaces between the organisation, the clients and the end-users

• As the service evolves over time, the service specification is modified to document the changing expectations of the client and the organisation

• Activities− Provide support for creating and maintaining the work products and tasks for

creating the service specification

− Document and implement the work products and tasks required for creating the service specification

− Support the implementation of creating the service specification

April 5, 2010 82

3 Service Design and Deployment - 3.5 Service Design

• Scope

− Create the service design based on the service specification

• Ensure that the service design is based on the client’s requirements and the set of services specified in the agreed-upon service specification in order to effectively meet the client’s requirements

• Activities

− Provide support for creating and maintaining the work products and tasks for creating the service design

−Document and implement the work products and tasks required for creating the service design

− Support the implementation of creating the service design

April 5, 2010 83

3 Service Design and Deployment - 3.6 Design Feedback

• Scope

− Establish and implement procedures to obtain feedback from the client on the designed service and to incorporate necessary changes

• Activities

− Provide support for creating and maintaining the procedures for obtaining service design feedback

−Document and implement the procedures for obtaining service design feedback

− Support the implementation of the procedures for obtaining service design feedback

April 5, 2010 84

3 Service Design and Deployment - 3.7 Verify Design

• Scope

− Establish and implement procedures to review and verify the service design

• Activities

− Provide support for creating and maintaining the procedures for service design review and verification across the organisation

−Document and implement the procedures for service design review and verification

− Support the implementation of the procedures for service design review and verification

April 5, 2010 85

3 Service Design and Deployment - 3.8 Deploy Service

• Scope

−Deploy the service based on the service design

• Activities

− Provide support for creating and maintaining the work products and tasks for deploying the service

−Document and implement the work products and tasks required for deploying the service

− Support the implementation of deploying the service

April 5, 2010 86

4 Service Delivery - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 87

4 Service Delivery - 4.1 Plan Service Delivery

• Scope

− Plan and track the service delivery according to the service design

• Activities

− Provide support for creating and maintaining the work products and tasks for planning and tracking the service delivery

−Document and implement the work products and tasks required for planning and tracking service delivery

− Support the implementation of planning and tracking the service delivery

April 5, 2010 88

4 Service Delivery - 4.2 Train Clients

• Scope

− Establish and implement procedures to train clients and end-users

• Activities

− Provide support for creating and maintaining the procedures for training clients and end-users

−Document and implement the procedures for training clients and end-users

− Support the implementation of the procedures for training clients and end-users

April 5, 2010 89

4 Service Delivery - 4.3 Deliver Service

• Scope

−Deliver service according to the service delivery plans

• Activities

− Provide support for creating and maintaining the work products and tasks for delivering service

−Document and implement the work products and tasks required for delivering service

− Support the implementation of delivering service

April 5, 2010 90

4 Service Delivery - 4.4 Verify Service Commitments

• Scope

− Establish and implement procedures to measure and verify that service commitments are being met

• Activities

− Provide support for creating and maintaining the procedures for verifying service commitments

−Document and implement the procedures for verifying service commitments

− Support the implementation of the procedures for verifying service commitments

April 5, 2010 91

4 Service Delivery - 4.5 Correct Problems

• Scope

− Establish and implement procedures to correct problems

• Activities

− Provide support for creating and maintaining the procedures for correcting problems

−Document and implement the procedures for correcting problems

− Support the implementation of the procedures for correcting problems

April 5, 2010 92

4 Service Delivery - 4.6 Prevent Known Problems

• Scope

− Establish and implement procedures to take preventive action forknown problems

• Activities

− Provide support for creating and maintaining the procedures for taking preventive actions for known problems across the organisation

−Document and implement the procedures for taking preventive actions for known problems

− Support the implementation of the procedures for taking preventive actions for known problems across the organisation

April 5, 2010 93

4 Service Delivery - 4.7 Service Modifications

• Scope

− Establish and implement procedures to make modifications to services

• Activities

− Provide support for creating and maintaining the procedures for modifying services

−Document and implement the procedures for modifying services

− Support the implementation of the procedures for modifying services

April 5, 2010 94

4 Service Delivery - 4.8 Financial Management

• Scope

− Establish and implement procedures for financial management of the engagement

• Activities

− Provide support for creating and maintaining the procedures for financial management of the engagement

−Document and implement the procedures for the financial management of the engagement

− Support the implementation of the procedures for financial management of the engagement

April 5, 2010 95

5 Knowledge Management - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 96

5 Knowledge Management - 5.1 Share Knowledge

• Scope

− Establish and implement a policy to share knowledge among stakeholders

• Activities

− Provide support for creating and maintaining a policy for sharing knowledge among stakeholders across the organisation

−Document and implement a policy for sharing knowledge among stakeholders

− Support the implementation of a policy for sharing knowledge among stakeholders across the organisation

April 5, 2010 97

5 Knowledge Management - 5.2 Provide Required Information

• Scope

− Identify, control and provide the information that personnel need to perform their work

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying, controlling and providing the information personnel need to perform their work

−Document and implement work products and tasks required for identifying, controlling and providing the information personnelneed to perform their work

− Support the implementation of identifying, controlling and making available the information personnel need to perform theirwork

April 5, 2010 98

5 Knowledge Management - 5.3 Knowledge System

• Scope

− Establish and maintain a knowledge system to identify, control and provide information

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and maintaining a knowledge system for use across the organisation

−Document and implement work products and tasks required for establishing and maintaining a knowledge system

− Support the implementation of establishing and maintaining a knowledge system for use across the organisation

April 5, 2010 99

5 Knowledge Management - 5.4 Process Assets

• Scope

− Establish and maintain a set of process assets for use across the organisation

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and maintaining a set of process assets for use across the organisation

−Document and implement work products and tasks required for establishing and maintaining a set of process assets

− Support the implementation of establishing and maintaining a setof process assets for use across the organisation

April 5, 2010 100

5 Knowledge Management - 5.5 Engagement Knowledge

• Scope

−Analyse and use knowledge gained from client engagements

• Activities

− Provide support for creating and maintaining the work products and tasks for analysing and using knowledge gained from client engagements across the organisation

−Document and implement work products and tasks required for analysing knowledge gained from client engagements

− Support the implementation of analysing and using knowledge gained from client engagements across the organisation

April 5, 2010 101

5 Knowledge Management - 5.6 Reuse

• Scope

− Identify and reuse work products

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying and reusing work products across the organisation

−Document and implement work products and tasks required for identifying and reusing work products

− Support the implementation of identifying and reusing work products across the organisation

April 5, 2010 102

5 Knowledge Management - 5.7 Version and Change Control

• Scope

− Establish and implement procedures to apply version control and change control to work products

• Activities

− Provide support for creating and maintaining the procedures for version control and change control

−Document and implement the procedures for version control and change control

− Support the implementation of the procedures for version controland change control

April 5, 2010 103

5 Knowledge Management - 5.8 Resource Consumption

• Scope

− Establish and implement procedures to analyse and use information on resources consumed

• Activities

− Provide support for creating and maintaining the procedures for analysing and using information on resource consumption

−Document and implement the procedures for analysing and using information on resource consumption

− Support the implementation of the procedures for analysing and using information on resource consumption

April 5, 2010 104

6 People Management - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 105

6 People Management - 6.1 Encourage Innovation

• Scope

− Establish and implement a policy to encourage and support innovation across the organisation

• Activities

− Provide support for creating and maintaining a policy for encouraging and supporting innovation across the organisation

−Document and implement a policy for encouraging and supporting innovation across the organisation

− Support the implementation of a policy for encouraging and supporting innovation across the organisation

April 5, 2010 106

6 People Management - 6.2 Participation in Decisions

• Scope

− Establish and implement a policy on the participation of personnel in decisions that affect their work commitments

• Activities

− Provide support for creating and maintaining a policy on the participation of personnel in decisions that affect their work commitments across the organisation

−Document and implement a policy on the participation of personnel in decisions that affect their work commitments

− Support the implementation of a policy on the participation of personnel in decisions that affect their work commitments acrossthe organisation

April 5, 2010 107

6 People Management - 6.3 Work Environment

• Scope

− Establish and maintain a work environment that enables personnel to work effectively

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and maintaining a work environment that enables personnel to work effectively

−Document and implement the work products and tasks required for establishing and maintaining an effective work environment

− Support the implementation of establishing and maintaining a work environment that enables personnel to work effectively

April 5, 2010 108

6 People Management - 6.4 Assign Responsibilities

• Scope

−Assign roles and responsibilities to personnel based on appropriate personnel competencies

• Activities

− Provide support for creating and maintaining the work products and tasks for assigning roles and responsibilities to personnel

−Document and implement the work products and tasks required for assigning roles and responsibilities to personnel

− Support the implementation of assigning roles and responsibilities to personnel

April 5, 2010 109

6 People Management - 6.5 Define Roles

• Scope

−Define and communicate the roles, responsibilities and authorityof personnel in the organisation

• Activities

− Provide support for creating and maintaining the work products and tasks for defining and communicating the roles, responsibilities and authority of personnel in the organisation

−Document and implement the work products and tasks required for defining and communicating the roles, responsibilities and authority of personnel in the organisation

− Support the implementation of defining and communicating the roles, responsibilities and authority of personnel in the organisation

April 5, 2010 110

6 People Management - 6.6 Workforce Competencies

• Scope

−Develop the workforce competencies needed to achieve organisational objectives

• Activities

− Provide support for creating and maintaining the work products and tasks for developing workforce competencies

−Document and implement the work products and tasks required for developing workforce competencies

− Support the implementation of developing workforce competencies

April 5, 2010 111

6 People Management - 6.7 Plan and Deliver Training

• Scope

− Establish and implement procedures to plan and deliver training

• Activities

− Provide support for creating and maintaining the procedures for planning and delivering training across the organisation

−Document and implement the procedures for planning and delivering training

− Support the implementation of the procedures for planning and delivering training across the organisation

April 5, 2010 112

6 People Management - 6.8 Plan and Deliver Training

• Scope

−Meet identified personnel competency needs by providing training

• Activities

− Provide support for creating and maintaining the work products and tasks for meeting identified personnel competency needs

−Document and implement the work products and tasks required for meeting personnel competency needs

− Support the implementation of meeting identified personnel competency needs

April 5, 2010 113

6 People Management - 6.9 Performance Feedback

• Scope

− Establish and implement procedures to provide feedback on performance to personnel

• Activities

− Provide support for creating and maintaining the procedures for providing performance feedback to personnel across the organisation

−Document and implement the procedures for providing performance feedback to personnel

− Support the implementation of the procedures for providing performance feedback to personnel across the organisation

April 5, 2010 114

6 People Management - 6.10 Performance Feedback

• Scope

− Establish and implement procedures to provide personnel with opportunities for career development

• Activities

− Provide support for creating and maintaining the procedures for career development across the organisation

−Document and implement the procedures for career development

− Support the implementation of the procedures for career development across the organisation

April 5, 2010 115

6 People Management - 6.11 Rewards

• Scope

− Provide rewards and recognition that encourage the achievement of organisational objectives

• Activities

− Provide support for creating and maintaining the work products and tasks for providing rewards and recognition that encourage the achievement of organisational objectives

−Document and implement the work products and tasks required for establishing rewards and recognition to encourage the achievement of organisational objectives

− Support the implementation of providing rewards and recognition that encourage the achievement of organisational objectives

April 5, 2010 116

7 Performance Management - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 117

7 Performance Management - 7.1 Engagement Objectives

• Scope

−Define, communicate and track engagement objectives

• Activities

− Provide support for creating and maintaining the work products and tasks for defining, communicating and tracking engagement objectives

−Document and implement the work products and tasks required for defining, communicating and tracking engagement objectives

− Support the implementation of defining, communicating and tracking engagement objectives

April 5, 2010 118

7 Performance Management - 7.2 Verify Processes

• Scope

− Establish and implement procedures to verify that processes are consistently performed as defined

• Activities

− Provide support for creating and maintaining the procedures for verifying that processes are consistently performed as defined

−Document and implement the procedures for verifying that processes are consistently performed as defined

− Support the implementation of the procedures for verifying that processes are consistently performed as defined

April 5, 2010 119

7 Performance Management - 7.3 Adequate Resources

• Scope

− Identify and provide adequate resources that personnel need to perform their work

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying and providing adequate resources to personnel

−Document and implement the work products and tasks required for identifying and providing adequate resources to personnel

− Support the implementation of identifying and providing adequate resources to personnel

April 5, 2010 120

7 Performance Management - 7.4 Organisational Objectives

• Scope

−Define, communicate and track organisational objectives

• Activities

− Provide support for creating and maintaining the work products and tasks for defining, communicating and tracking organisational objectives

−Document and implement the work products and tasks required for defining, communicating and tracking organisational objectives

− Support the implementation of defining, communicating and tracking organisational objectives

April 5, 2010 121

7 Performance Management - 7.5 Review Organisational Performance

• Scope

− Establish and implement procedures to review organisational performance

• Activities

− Provide support for creating and maintaining the procedures for reviewing organisational performance

−Document and implement the procedures for reviewing organisational performance

− Support the implementation of the procedures for reviewing organisational performance

April 5, 2010 122

7 Performance Management - 7.6 Make Improvements

• Scope

−Make improvements based on reviews of organisational performance

• Activities

− Provide support for creating and maintaining the work products and tasks for making improvements across the organisation

−Document and implement the work products and activities required to make improvements

− Support the implementation of making improvements across the organisation

April 5, 2010 123

7 Performance Management - 7.7 Achieve Organisational Objectives

• Scope

− Establish and implement programs to achieve organisational objectives

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and implementing programs to achieve organisational objectives

−Document and implement the work products and tasks required for establishing programs to achieve organisational objectives

− Support the implementation of programs to achieve organisational objectives

April 5, 2010 124

7 Performance Management - 7.8 Capability Baselines

• Scope

−Define capability baselines for the organisation by analysing performance data

• Activities

− Provide support for creating and maintaining the work products and tasks for defining capability baselines

−Document and implement the work products and tasks required for defining capability baselines

− Support the implementation of defining capability baselines

April 5, 2010 125

7 Performance Management - 7.9 Benchmark

• Scope

− Benchmark organisational performance to identify opportunities for improvement

• Activities

− Provide support for creating and maintaining the work products and tasks for benchmarking organisational performance

−Document and implement the work products and tasks required for benchmarking organisational performance

− Support the implementation of benchmarking organisational performance

April 5, 2010 126

7 Performance Management - 7.10 Prevent Potential Problems

• Scope

− Establish and implement programs to take preventive action on potential problems

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and implementing programs to take preventive action on potential problems

−Document and implement the work products and tasks required for establishing programs to take preventive action on potentialproblems

− Support the implementation of programs to take preventive action on potential problems

April 5, 2010 127

7 Performance Management - 7.11 Deploy Innovations

• Scope

− Establish and implement programs to deploy innovations across the organisation

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and implementing programs to deploy innovations across the organisation

−Document and implement the work products and tasks required for establishing programs to deploy innovations

− Support the implementation of programs to deploy innovations across the organisation

April 5, 2010 128

8 Relationship Management - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 129

8 Relationship Management - 8.1 Client Interactions

• Scope

− Establish and implement procedures to manage interactions with clients

• Activities

− Provide support for creating and maintaining the procedures for managing client interactions

−Document and implement the procedures for managing client interactions

− Support the implementation of the procedures for managing client interactions

April 5, 2010 130

8 Relationship Management - 8.2 Select Suppliers and Partners

• Scope

− Establish and implement procedures to select suppliers and partners based on their ability to meet identified requirements

• Activities

− Provide support for creating and maintaining the procedures for selecting suppliers and partners

−Document and implement the procedures for selecting suppliers and partners

− Support the implementation of the procedures for selecting suppliers and partners

April 5, 2010 131

8 Relationship Management - 8.3 Manage Suppliers and Partners

• Scope

−Manage the performance of suppliers and partners against their commitments

• Activities

− Provide support for creating and maintaining the work products and tasks for managing the performance of suppliers and partners

−Document and implement the work products and tasks required for managing the performance of suppliers and partners

− Support the implementation of managing the performance of suppliers and partners

April 5, 2010 132

8 Relationship Management - 8.4 Cultural Fit

• Scope

− Identify cultural attributes that impact the service and implement actions to achieve a cultural fit

• Activities

− Provide support for creating and maintaining the work products and tasks for achieving a cultural fit across the organisation

−Document and implement the work products and tasks required for achieving a cultural fit

− Support the implementation of achieving a cultural fit across the organisation

April 5, 2010 133

8 Relationship Management - 8.5 Stakeholder Information

• Scope

−Analyse and use client and other stakeholder information

• Activities

− Provide support for creating and maintaining the work products and tasks for analysing and using client and other stakeholder information

−Document and implement the work products and tasks required for analysing client and other stakeholder information

− Support the implementation of analysing and using client and other stakeholder information

April 5, 2010 134

8 Relationship Management - 8.6 Client Relationships

• Scope

− Establish and implement procedures to manage client relationships

• Activities

− Provide support for creating and maintaining the procedures for managing client relationships across the organisation

−Document and implement the procedures for managing client relationships

− Support the implementation of the procedures for managing client relationships across the organisation

April 5, 2010 135

8 Relationship Management - 8.7 Supplier and Partner Relationships

• Scope

− Establish and implement procedures to manage relationships with suppliers and partners

• Activities

− Provide support for creating and maintaining the procedures for managing relationships with suppliers and partners across the organisation

−Document and implement the procedures for managing relationships with suppliers and partners

− Support the implementation of the procedures for managing relationships with suppliers and partners across the organisation

April 5, 2010 136

8 Relationship Management - 8.8 Value Creation

• Scope

− Proactively identify value creation opportunities and communicate them to the client

• Activities

− Provide support for creating and maintaining the work products and tasks for proactively identifying and communicating value creation opportunities across the organisation

−Document and implement the work products and tasks proactively required for identifying and communicating value creation opportunities

− Support the implementation of proactively identifying and communicating value creation opportunities across the organisation

April 5, 2010 137

9 Technology Management - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 138

9 Technology Management - 9.1 Acquire Technology

• Scope

− Establish and implement procedures to acquire and deploy technology

• Activities

− Provide support for creating and maintaining the procedures for acquiring and deploying technology

−Document and implement the procedures for acquiring and deploying technology

− Support the implementation of the procedures for acquiring and deploying technology

April 5, 2010 139

9 Technology Management - 9.2 Technology Licenses

• Scope

− Establish and implement procedures to manage technology licenses

• Activities

− Provide support for creating and maintaining the procedures for managing technology licenses

−Document and implement the procedures for managing technology licenses

− Support the implementation of the procedures for managing technology licenses

April 5, 2010 140

9 Technology Management - 9.3 Control Technology

• Scope

− Establish and implement procedures to track and control changes to the technology infrastructure

• Activities

− Provide support for creating and maintaining the procedures for tracking and controlling changes to the technology infrastructure

−Document and implement the procedures for tracking and controlling changes to the technology infrastructure

− Support the implementation of the procedures for tracking and controlling changes to the technology infrastructure

April 5, 2010 141

9 Technology Management - 9.4 Technology Integration

• Scope

− Establish and implement procedures to manage integration of the organisation’s technology infrastructure

• Activities

− Provide support for creating and maintaining the procedures for managing integration of the technology infrastructure

−Document and implement the procedures for managing integration of the technology infrastructure

− Support the implementation of the procedures for managing integration of the technology infrastructure

April 5, 2010 142

9 Technology Management - 9.5 Optimise Technology

• Scope

−Optimise the overall performance of the technology infrastructure needed to deliver all services

• Activities

− Provide support for creating and maintaining the work products and tasks for optimising the technology infrastructure across the organisation

−Document and implement the work products and tasks required for optimising the technology infrastructure

− Support the implementation of optimising the technology infrastructure across the organisation

April 5, 2010 143

9 Technology Management - 9.6 Proactively Introduce Technology

• Scope

− Establish and implement procedures to proactively identify and introduce appropriate technology

• Activities

− Provide support for creating and maintaining the procedures for proactively identifying and introducing technology across the organisation

−Document and implement the procedures for proactively identifying and introducing technology

− Support the implementation of the procedures for proactively identifying and introducing technology across the organisation

April 5, 2010 144

10 Threat Management - ActivitiesOutsourcing



Delivery Ongoing

1 Service Transfer


4 Service Delivery


6 People Management










2.1 Negotiations

2.2 Pricing


Conditions






2.9 Contract Roles







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




Objectives


7.9 Benchmark






Partners


Partners

8.4 Cultural Fit




Relationships

8.8 Value Creation







Technology




10.4 Security



Compliance


April 5, 2010 145

10 Threat Management - 10.1 Risk Management

• Scope

− Establish and implement a policy on risk management

• Activities

− Provide support for creating and maintaining a policy for managing risk

−Document and implement a policy for managing risk

− Support the implementation of a policy for managing risk

April 5, 2010 146

10 Threat Management - 10.2 Engagement Risk

• Scope

− Identify, assess and manage risks specific to the client engagement

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying, assessing and managing engagement-specific risks

−Document and implement the work products and activities required to identify, assess and manage engagement-specific risks

− Support the implementation of identifying, assessing and managing engagement-specific risks

April 5, 2010 147

10 Threat Management - 10.3 Risk Across Engagements

• Scope

− Establish and implement procedures to manage risks across clientengagements

• Activities

− Provide support for creating and maintaining the procedures for managing risks across client engagements

−Document and implement the procedures for managing risks across client engagements

− Support the implementation of the procedures for managing risks across client engagements

April 5, 2010 148

10 Threat Management - 10.4 Security

• Scope

− Establish and implement procedures to meet security requirements

• Activities

− Provide support for creating and maintaining the procedures for meeting security requirements

−Document and implement the procedures for meeting security requirements

− Support the implementation of the procedures for meeting security requirements

April 5, 2010 149

10 Threat Management - 10.5 Intellectual Property

• Scope

− Establish and implement procedures to protect the intellectual property of stakeholders

• Activities

− Provide support for creating and maintaining the procedures for protecting the intellectual property of stakeholders

−Document and implement the procedures for protecting the intellectual property of stakeholders

− Support the implementation of the procedures for protecting the intellectual property of stakeholders

April 5, 2010 150

10 Threat Management - 10.6 Statutory and Regulatory Compliance

• Scope

− Establish and implement procedures to comply with statutory and regulatory requirements

• Activities

− Provide support for creating and maintaining the procedures for statutory and regulatory compliance

−Document and implement the procedures for statutory and regulatory compliance

− Support the implementation of the procedures for statutory and regulatory compliance

April 5, 2010 151

10 Threat Management - 10.7 Disaster Recovery

• Scope

− Establish and implement disaster recovery procedures

• Activities

− Provide support for creating and maintaining the procedures for disaster recovery

−Document and implement the procedures for disaster recovery

− Support the implementation of the procedures for disaster recovery

April 5, 2010 152

Outsourcing for End-User Organisations

April 5, 2010 153

Outsourcing Challenges

• Establishing an appropriate outsourcing strategy

• Identifying capabilities that could be outsourced

• Developing appropriate approaches for outsourcing activities

• Managing risks throughout their outsourcing activities

• Identifying, selecting and negotiating with service providers

• Conducting service provider governance and performance management

• Managing relationships with their service providers

April 5, 2010 154

Reasons for Adopting a Structured Approach to Outsourcing

• Provides a focus on outsourcing management for IT-enabled services

• Builds confidence and trust with all stakeholders

• Enables effective communication with all stakeholders

• Provides increased agility through improved capability to effectively manage change

• Enables risks to be managed effectively

• Provides effective business controls

• Enables continual improvement of process and performance

• Allows the organisation to focus on core competencies and strategic operations

• Builds and sustains the competence to effectively manage the outsourcing strategy and outsourcing engagements

• Improves outsourcing governance

• Allows enhanced supplier/partner relationship management capabilities

• Provides for service measurement that supports action

April 5, 2010 155


• Same issues arise for outsourcing organisations as for service providers

• Additional issues that arise for outsourcing organisations

− Establishing a strategy for the organisation’s outsourcing activities

− Being an informed buyer of outsourcing services

−Actively managing outsourcing risks

April 5, 2010 156

Outsourcing Organisation Issue 1 - Establishing a strategy For the Organisation’s Outsourcing Activities• May not have sufficient focus on analysis, initiation and completion

activities

• May not have a strategy for outsourcing or may have a strategy that is not synchronised or aligned with the IT or corporate strategies

• Outsourcing strategy should − Clearly describe outsourcing objectives− Be aligned with with the organisation’s business, growth and continuity

strategies− Be defined, documented and followed− Be regularly updated as conditions change.− Guide analysis activities to prepare for and overcome difficulties in the initial

decision making− Ensure that the organisation understands which capabilities or processes

(strategic/non-strategic, core/non-core, or key/non-key) should be retained in the organisation

− Consider if non-core activities are being outsourced too automatically− Ensure that the organisation gives adequate consideration to the full economic

impact of its outsourcing activities

April 5, 2010 157

Outsourcing Organisation Issue 2 - Being an Informed Buyer of Outsourcing Services

• Be an informed customer of outsourcing services

• Decisions often made to outsource without considering the fit with broader or long-term business strategies, the impact on short-term organisational performance, whether outsourcing is appropriate or if they are joining a fad, or the risks of losing internal expertise

• Be actively involved in managing the activities in the analysis and initiation phases of the outsourcing lifecycle

• Outsourcing should be a part of the organisation’s process management approach

• Develop a competency in outsourcing and managing outsourcing relationships

• Many view their outsourcing activities as separate isolated projects

• Avoid “distress outsourcing” - outsourcing a problem area as a way to solve that problem - often leads to more distress− Passing a problem to a service provider does not eliminate the problem - it increases

the number of parties involved in or trying to solve it

April 5, 2010 158

Outsourcing Organisation Issue 3 - Actively Managing Outsourcing Risks

• Outsourcing is not the transfer the governance, accountability or risks associated with the outsourced activity

• Client organisations should actively identify, manage and mitigate all relevant risks− Poor strategic planning with respect to outsourcing− Inadequate alignment of the outsourcing strategy, corporate strategy and IT

strategies− Potential changes in client’s business practices and processes− In-house resistance and poor communication− Change management efforts are often neglected or ignored− Lack of clear division of responsibilities between client organisations and their

service providers− Communications difficulties with the service providers due to cultural

differences or poorly-defined service provider interactions− Potential dependency on service providers− Reputation risks, where a highly visible problem at the service provider is a

potential problem for the client due to adverse publicity

April 5, 2010 159

Phases of Outsourcing Relationship for End-User Organisations

Ongoing

Initiation Delivery CompletionAnalysis

April 5, 2010 160


• Every outsourcing relationship has five phases

−Analysis – 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

− 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 5, 2010 161

Analysis Phase

• 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 organisation’s 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 5, 2010 162

Initiation Phase

• 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 provider’s 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 provider’s responsibilities and commitments

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

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

April 5, 2010 163

Delivery Phase

• Concerned with monitoring the service provider’s service delivery capabilities, including the ongoing monitoring of service provider performance to verify that commitments are being met, monitoringchanges, management of the finances and agreements associated with the service provision, fostering realistic expectations andperforming value analysis

− Planning and tracking the outsourcing management activities

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

− Managing the finances associated with the service delivery

− 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 5, 2010 164

Completion Phase

• Concerned with closing down the engagement at the end of the outsourcing lifecycle− 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 5, 2010 165

Ongoing Phase

• 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 organisation’s performance and taking action to improve it

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

− Identify and control threats to the organisation’s ability to meet its objectives and client requirements

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

April 5, 2010 166

Key Capabilities Within Outsourcing Lifecycle for End-User Organisations

Outsourcing Strategy

Management

Governance Management

Relationship Management

Value Management

Technology Management

People Management

Outsourcing Planning

Outsourcing Agreements

Sourced Services

Management

Outsourcing Completion

Outsourcing Opportunity

Analysis

Ongoing

Initiation Delivery CompletionAnalysis

Knowledge Management

Organisational Change

Management

Threat Management

Outsourcing Approach

Service Transfer

Service Provider

Evaluation

April 5, 2010 167

Key Capabilities and Constituent Practices of Outsourcing Process - 1 Outsourcing


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


4.2 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




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 5, 2010 168

Key Capabilities and Constituent Practices of Outsourcing Process - 2

Outsourcing Capabilities and

Skills

Ongoing Phase

Governance Focused

Competency and Change Focused

Environment Focused

9 Outsourcing Strategy

Management

10 Governance Management


12 Value Management

13 Organisational Change

Management

14 People Management




9.1 Outsourcing Sponsorship

9.2 Outsourcing Constraints

9.3 Potential Outsourcing Areas

9.4 Outsourcing Objectives

9.5 Organisational Outsourcing

Strategy

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


17.4 Security and Privacy

17.5 Compliance

17.6 Business Continuity

April 5, 2010 169

Key Capabilities and Constituent Practices

• Idealised set of steps for an organisation looking to outsource to perform when initiating the project

• 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 system/application being outsourced, duration of contract

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

• Reduces risk of failure

• Assists with the selection of the most suitable outsourcing partner

April 5, 2010 170

Analysis Phase - Outsourcing Opportunity Analysis

• Functional analysis of the current operations of the organisation and identification of potential functions, processes or services that could be outsourced

• Addresses the critical issues of being an informed buyer of outsourcing services and translating implicit and explicit needs into defined requirements with agreed-upon levels of quality

• Document the current state and understand the current business processes of the organisation

• Determine the criteria for selecting outsourcing opportunities

• Organise outsourcing opportunities

April 5, 2010 171

Analysis Phase - Outsourcing Approach

• Deciding on the type of outsourcing for a specific outsourcing opportunity

• Determining the proposed outsourcing approach

• Deciding on the type of outsourcing arrangements desired, including the outsourcing approach and the operational governance model ofthe proposed outsourcing action

• Preparing a business case for outsourcing which includes carrying out a cost-benefit analysis and determining stakeholder buy-in

• Organising the impact and risks of the proposed outsourcing action

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

April 5, 2010 172

Initiation Phase - Outsourcing Planning

• Planning for implementation of the outsourcing approach for a planned outsourcing initiative

• Establishing a capability to plan and manage the outsourced service. Getting all the resources, including manpower, ready to execute the outsourcing agreement

• Developing a outsourcing plan for a planned outsourcing activity

• Developing the Service(s) Requirements Document or Service(s) Definitions Document and having the basic structure of the agreement in place

• Developing any documentation needed to communicate the client’s inquiries, requests and requirements to prospective service providers

April 5, 2010 173

Initiation Phase - Service Provider Evaluation

• Soliciting potential service providers, screening the set of potential service providers and selecting the preferred service providers

• Comparing and assessing alternative solutions and service providers in their ability to create business value, benefits and cost savings, delivery service quality and flexibility to accommodate business changes throughout the planned duration of the agreement

April 5, 2010 174

Initiation Phase - Outsourcing Agreements

• Carrying out service confirmation, negotiating terms and conditions of the agreements and entering into an agreement with the selected service providers

• Dealing with renegotiation and making changes to agreements

• Preparing for negotiation by having an organisational position on cost and other topics that need to be negotiated

• Defining formal service level agreements and service provider performance measures

• Understanding service provider’s capabilities by gathering information about the service provider

• Working with service providers to confirm the assumptions that impact commitments.

• Establishing a formal agreement with service providers that clearly articulates the clients’ and service provider’s responsibilities and commitments

April 5, 2010 175

Initiation Phase - Service Transfer

• Successfully transferring resources between the client organisation and its service providers by creating and implementing a transfer plan; creating client/service provider teams; identifying key skill sets/personnel to retain in-house or transfer to the service providers; ensuring service design meets the client’s needs; and transferring resources, personnel and knowledge to service provider

• Planning and managing the service transfer

• Reviewing the service provider’s service design information

• Transferring knowledge and personnel to the service provider

• Transferring resources, including technology infrastructure and work environment to the service provider

April 5, 2010 176

Delivery Phase - Sourced Services Management

• Having the capability to manage service providers and the issues and challenges that arise after the agreement has been reached

• Focus on operational issues like measuring performance against the SLAs, monitoring SLAs, managing performance and taking corrective action, if required.

• Responsibility for managing and monitoring the financial control for the agreement

• Responsibility for the administration of the agreement and ensuring that the service provider is executing according to the terms and conditions of the agreement

• Focus on managing relations with the service providers of a outsourced service, addressing fostering realistic expectations of the service provider performance (expectation management) and managing problems

• Managing changes

• Reviewing the service provider’s performance against the agreed-upon deliverables required business benefits, soliciting and evaluating feedback from stakeholders and reviewing performance against the agreed upon service commitments and deliverables

April 5, 2010 177

Completion Phase - Outsourcing Completion

• Planning and making provisions for the closure of the relationship/project and ensuring that the hand off is smooth

• Assessing the outcome of the outsourced service as well as the performance of the service provider and in-house teams

• Ensure continuity of service during completion

• Ensuring that the project effectiveness, lessons learned, best practices and key project metrics are documented

• Enable evaluation of performance measures across other outsourcing projects to serve as guides for undertaking future outsourcing initiatives

• Following a formal process for concluding the outsourced service, ensuring all deliverables are consolidated (code, system documentation, etc) and are handed back to the client, along with required knowledge transfer, as directed by the client organisation

April 5, 2010 178

Ongoing Phase - Outsourcing Strategy Management

• Determining the outsourcing strategy and setting organisational objectives or goals for outsourcing

• Address issues such as will the organisation be outsourcing; how to structure the outsourcing; and what kind of outsourcing strategy to follow in terms of single source, best source, alliance, or other forms of outsourcing agreements

April 5, 2010 179

Ongoing Phase - Governance Management

• Establishing organisational structure for outsourcing and organisational process management for outsourcing processes and procedures

• Ensuring the effectiveness of interactions with stakeholders; managing relationships between clients and service providers, aswell as supplier and partner relationships, to ensure that commitments are met; innovating, building flexibility and increasing responsiveness to meet

• Ensuring alignment of outsourced services with the client organisation’s strategy and architecture

• Addressing issues related to aligning outsourcing with the technology strategy, control of technology architecture and design and future technology direction for the client organisation

April 5, 2010 180

Ongoing Phase - Relationship Management

• Establishing and managing long-term relations with the service providers and developing relationships with service providers

• Managing long term relations with the service providers

• Managing agreements, managing expectations and managing issues and managing operations

April 5, 2010 181

Ongoing Phase - Value Management

• Fostering and managing the culture of continuous improvement so that the client derives value from the outsourcing engagement and ensuring ongoing alignment of the outsourcing strategy and the organisation’s outsourcing performance with the organisation’s objectives

• Reviewing the business requirements against market benchmarks bybenchmarking the performance of the organisation, competitive analysis of its outsourcing performance as compared to that of other client organisations and organising performance of internal outsourcing processes

• Reviewing the outsourcing strategy for business alignment and

• Institutionalising the culture of innovation, ensuring that continuous improvement enables relationships where the client organisation and the service provider can effectively meet or exceed stakeholder value drivers

April 5, 2010 182

Ongoing Phase - Organisational Change Management

• Change management process to guide the client’s adoption of new systems (organisational and technological) and new ways of achieving business objectives through outsourcing

• Ensuring readiness for change and involving relevant sponsors and stakeholders

• Preparing for the change management process to guide the client organisation’s adoption of the new systems (the organisational and technological changes), defining the proper strategy for managing change, developing a team of change management leaders, identifying and employing long term change management practices and engaging employees and service providers

• Re-engineering the organisation and business processes and workflows to fit the new structure

• Developing and executing the communication strategies and plans, both internal and external, is very critical for the entire organisational change process

• Managing the human aspects of change

• Managing ongoing change and overcoming resistance to change and implementing methodologies to ensure effective and successful overall management of the organisational change

April 5, 2010 183

Ongoing Phase - People Management

• Providing and managing skilled resources and the necessary environment for the organisation’s outsourcing activities

• Clearly defining and communicating outsourcing roles and responsibilities to personnel

• Identifying workforce and personnel competency needs and developing (i.e., training) or acquiring personnel with the necessary competencies to perform the organisation’s outsourcing activities

April 5, 2010 184

Ongoing Phase - Knowledge Management

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

• Ensuring that outsourcing information is appropriately made available and providing the information needed by personnel in a knowledge system that allows controlled, but efficient, access

• Maintaining information and lessons learned to improve current and future outsourcing performance

• Understanding the market and screening the potential set of service providers and assisting them in understanding the organisation’s needs

April 5, 2010 185

Ongoing Phase - Technology Management

• Monitoring and managing the technology infrastructure

• Managing the change of the technology base and ensuring that technology strategy and architecture are managed consistent with business needs.

• Managing technology assets and the licensing of technology

April 5, 2010 186

Ongoing Phase - Threat Management

• Identifying and actively managing threats to the client organisation’s ability to meet its business and outsourcing objectives and requirements

• Managing outsourcing risks, consistent with the organisation’s existing risk management policies, by identifying, assessing and controlling risks

• Managing security, privacy, confidentiality and intellectual property threats

• Ensuring business continuity, including concerns regarding recovery from disasters

• Monitoring statutes and regulations to ensure compliance

April 5, 2010 187

1 Outsourcing Opportunity Analysis - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 188

1 Outsourcing Opportunity Analysis - 1.1 Define Current State

• Scope

− Document the current organisational structure and process model

− A solid understanding of the current state of the organisation can serve as a basis for defining the services, their performance and service levels, requirements and business case for potential outsourcing actions

− Not establishing a baseline understanding of current processes can lead to ill-informed outsourcing decisions and greater risk in achieving the planned objectives for outsourcing actions

• Activities

− Provide support for creating and maintaining the work products and tasks for documenting the current organisational structure and process model

− Document and implement the work products and tasks required for documenting the current organisational structure and process model

− Support the implementation of documenting the current organisational structure and process model

April 5, 2010 189

1 Outsourcing Opportunity Analysis - 1.2 Outsourcing Criteria

• Scope

− Define the relevant criteria for identifying outsourcing opportunities

− Criteria should align with the organisational outsourcing strategy and objectives so that the client’s resources are focused on the opportunities most likely to meet the organisation’s outsourcing objectives, such as to source functions that produce the highest cost savings return at the lowest cost and risk

• Activities

− Provide support for creating and maintaining the work products and tasks for defining the relevant criteria for identifying outsourcing opportunities

− Document and implement the work products and tasks required for defining the relevant criteria for identifying outsourcing opportunities

− Support the implementation of defining the relevant criteria for identifying outsourcing opportunities

April 5, 2010 190

1 Outsourcing Opportunity Analysis - 1.3 Demand Identification

• Scope

− Identify potential outsourcing opportunities

− Focus on those opportunities most likely to meet the organisation’s outsourcing objectives, while also meeting the defined criteria, which will lead to further analysis of whether these potential opportunities should be pursued

− Without taking a disciplined approach to this decision-making, the organisation risks selecting less than optimum outsourcing opportunities, or more risky outsourcing opportunities

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying potential outsourcing opportunities

− Document and implement the work products and tasks required for identifying potential outsourcing opportunities

− Support the implementation of identifying potential outsourcing opportunities

April 5, 2010 191

1 Outsourcing Opportunity Analysis - 1.4 Outsourcing Options

• Scope

− Organise the options that the organisation has to source the services, like assessment of the criticality of the business activity, assessment of the external supply market (identification of potential service providers), deciding on the relevant types of outsourcing relationship and aligning outsourcing decisions with performance and business needs

− Necessary in order to have a firm basis for developing the business case for any outsourcing activity

• Activities

− Provide support for creating and maintaining the work products and tasks for organising outsourcing options for potential outsourcing opportunities

− Document and implement the work products and tasks required for organising outsourcing options for potential outsourcing opportunities

− Support the implementation of organising outsourcing options for potential outsourcing opportunities

April 5, 2010 192

2 Outsourcing Approach - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 193

2 Outsourcing Approach - 2.1 Outsourcing Approach

• Scope− Identify and document the outsourcing approach for the proposed outsourcing

action

− Examine possible alternatives and determine the preferable approach

− Establishing the outsourcing approach includes defining the specific objectives and outsourcing approach (or procurement strategy) to be used in selecting service providers


identifying and documenting the outsourcing approach for the proposed outsourcing action

− Document and implement the work products and tasks required for identifying and documenting the outsourcing approach for the proposed outsourcing action

− Support the implementation of identifying and documenting the outsourcing approach for the proposed outsourcing action

April 5, 2010 194

2 Outsourcing Approach - 2.2 Business Case

• Scope− Establish and implement procedures to develop and validate the business case

for outsourcing− Quantitative and qualitative measures help determine the full effect of the

proposed outsourcing action− Business case should be based on accurate data− Preliminary estimate of potential costs should not overlook the “extra” costs,

such as potential knowledge transfer and governance and coordination costs for managing the service providers and their relationships

− Business case enables decision makers to assess the full costs, benefits and risks of the potential outsourcing opportunity

• Activities− Provide support for creating and maintaining the procedures for developing

and validating the business case for outsourcing− Document and implement the procedures required for developing and

validating the business case for outsourcing− Support the implementation of developing and validating the business case for

outsourcing

April 5, 2010 195

2 Outsourcing Approach - 2.3 Governance Model

• Scope− Identify and document the governance model for the proposed outsourcing action− Governance model helps clarify how the client will manage the proposed outsourcing

action − Used to describe how the processes and authority for service delivery, risk, conflict

resolution and responsibility for the proposed outsourcing action will be executed among the client’s stakeholders, outsourcing organisation and service providers

− Governance model will help ensure that• The service provider delivers services as promises and meets service commitments smoothly

and effectively• The client can make the right decisions at the right time• The client can effectively manage key stakeholders’ expectations for service delivery


identifying and documenting the governance model for the proposed outsourcing action

− Document and implement the work products and tasks required for identifying and documenting the governance model for the proposed outsourcing action

− Support the implementation of identifying and documenting the governance model for the proposed outsourcing action

April 5, 2010 196

2 Outsourcing Approach - 2.4 Impact and Risk Analysis

• Scope

− Perform impact and risk analyses of the proposed outsourcing action

− Identify, organise and prioritise risks of the proposed outsourcing action

− Provides the foundation for proactive risk management throughout the life of the outsourcing initiative

− Risk analysis increases confidence in ability to manage risk and ability to ensure an appropriate level of service delivery despite the occurrence of problems

• Activities

− Provide support for creating and maintaining the work products and tasks for performing impact and risk analyses of the proposed outsourcing action

− Document and implement the work products and tasks required for performing impact and risk analyses of the proposed outsourcing action

− Support the implementation of performing impact and risk analyses of the proposed outsourcing action

April 5, 2010 197

2 Outsourcing Approach - 2.5 Outsourcing Initiation Decision

• Scope− Decide to initiate the proposed outsourcing action

− Makes a outsourcing initiation decision whether or not to source the proposed outsourcing action, consistent with the outsourcing objectives for the client organisation, impact/risk analyses and business case analyses

− Outsourcing decision sets the groundwork for future governance and outsourcing management activities

− Crucial that the decision be well-informed and supported by relevant data

− Need to avoid a decision being made in the blind without adequate consideration of its implications for the organisation as it moves forward


deciding to initiate the proposed outsourcing action

− Document and implement the work products and tasks required for deciding to initiate the proposed outsourcing action

− Support the implementation of deciding to initiate the proposed outsourcing action

April 5, 2010 198

3 Outsourcing Planning - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 199

3 Outsourcing Planning - 3.1 Establish Outsourcing Project

• Scope

− Establish and implement plans for managing the outsourcing project for each outsourcing action

− Failure to provide appropriate and sufficient, governance of outsourcing activities can cause innumerable difficulties by not having sufficient resources to perform the necessary outsourcing management activities

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing and implementing the plans for managing outsourcing project for each outsourcing action

− Document and implement the work products and tasks required for establishing and implementing the plans for managing the outsourcing project for each outsourcing action

− Support the implementation of establishing and implementing the plan for managing the outsourcing project for each outsourcing action

April 5, 2010 200

3 Outsourcing Planning - 3.2 Service Definition

• Scope− Define and document the services and service conditions

− Important that the client organisation set out in specific and measurable terms the services required, how they are to be delivered and the duration that they are required for, as well as the performance standards (service levels) that relate to each of the services to be provided

− Clearly document the scope of the service to be performed in service specifications or service catalogs, clearly specifying the desired results and defining the industry standards to be followed

− Defining detailed performance measures allow the client organisation to document the business requirements and rules, service levels and metrics to clarify customer expectations regarding the nature of the relationship, the levels of service to be delivered, the price and how performance will be measured, monitored and reported

• Activities− Provide support for creating and maintaining the work products and tasks for defining

and documenting the services and service conditions

− Document and implement the work products and tasks required for defining and documenting the services and service conditions

− Support the implementation of defining and documenting the services and service conditions

April 5, 2010 201

3 Outsourcing Planning - 3.3 Service Provider Selection Procedures

• Scope

− Establish and implement procedures to select service providers

− Establish detailed procedures that require service providers to answer specific requests in a way that allows the client to compare responses and correlate data

− The greater the importance of the potential outsourcing activity, the more attention should be given to the service provider selection procedures

• Activities

− Provide support for creating and maintaining the procedures for selecting potential service providers

− Document and implement the procedures required for selecting potential service providers

− Support the implementation of selecting potential service providers

April 5, 2010 202

3 Outsourcing Planning - 3.4 Evaluation Criteria

• Scope− Define the evaluation criteria to be used in selecting service providers

according to documented procedures− Main principles for rating should be incorporated in the solicitation− Evaluation criteria should provide the basis for evaluating between potential

service providers− Documenting the evaluation criteria can minimise the possibility that decisions

will be second-guessed, or that the reason for making the outsourcing decision will be forgotten


defining the evaluation criteria to be used in selecting service providers according to documented procedures

− Document and implement the work products and tasks required for defining the evaluation criteria to be used in selecting service providers according to documented procedures

− Support the implementation of defining the evaluation criteria to be used in selecting service providers

April 5, 2010 203

3 Outsourcing Planning - 3.5 Prepare Service Requirements

• Scope− Prepare requirements to communicate to prospective service providers

according to documented procedures

− Requirements outline the potential agreement with the service provider

− Objective should be to attract the most responses from the most qualified providers

− Provide as much information as possible to give service providers a good understanding of what is expected of them


preparing requirements to communicate to prospective service providers according to documented procedures

− Document and implement the work products and tasks required for preparing requirements to communicate to prospective service providers according to documented procedures

− Support the implementation of preparing requirements to communicate to prospective service providers

April 5, 2010 204

4 Service Provider Evaluation - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 205

4 Service Provider Evaluation - 4.1 Communicate Requirements

• Scope− Communicate requirements to prospective service providers according to

documented selection procedures− Engaging potential service providers is critical to having a qualified pool of

service providers to select from− Failure to follow standard procedures in soliciting prospective service providers

can lead to inconsistencies in responses and serve as a potential source of risks or failures in future activities

− Consistency in actions with prospective service providers may also be required for compliance with ethical and legal requirements on the selection process


communicating requirements to prospective service providers according to the documented selection procedures

− Document and implement the work products and tasks required for communicating requirements to prospective service providers according to the documented selection procedures

− Support the implementation of communicating requirements to prospective service providers

April 5, 2010 206

4 Service Provider Evaluation - 4.2 Evaluate Potential Service Providers

• Scope

− Evaluate potential service providers using documented criteria and selection procedures

− Many aspects, including the strategic alignment, reputation, references, experience, financial goals, risk, resource capabilities and information security should be considered while choosing the service provider

• Activities

− Provide support for creating and maintaining the work products and tasks for evaluating potential service providers according to the documented selection procedures

− Document and implement the work products and tasks required for evaluating potential service providers according to the documented selection procedures

− Support the implementation of evaluating potential service providers

April 5, 2010 207

4 Service Provider Evaluation - 4.3 Select Candidate Service Providers

• Scope− Select candidate service providers according to the documented selection

procedures

− By following the documented selection procedures, the client should be able to use the appropriate evaluation criteria, gather the necessary objective data and guarantee that its overall selection process proceeds in a structured format

− Creates a paper trail that can be useful if there is a need to explain how they arrived at a specific selection


selecting candidate service providers according to the documented selection procedures

− Document and implement the work products and tasks required for selecting candidate service providers according to the documented selection procedures

− Support the implementation of selecting candidate service providers

April 5, 2010 208

5 Outsourcing Agreements - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 209

5 Outsourcing Agreements - 5.1 Negotiations Guidelines

• Scope

− Establish and implement guidelines for negotiations with service providers

− Having these guidelines provides a structured approach to negotiation and can improve the internal stakeholder’s confidence in the outsourcing organisation

− Guidelines also help protect the client organisation from legal or performance issues by verifying that the necessary aspects of negotiations are covered

• Activities

− Provide support for creating and maintaining the guidelines for negotiations with service providers

− Document and implement the guidelines required for negotiations with service providers

− Support the implementation of negotiations with service providers

April 5, 2010 210

5 Outsourcing Agreements - 5.2 Confirm Existing Conditions

• Scope

− Establish and implement guidelines to confirm existing conditions

−Helps mitigate risk by verifying that the service provider is making its commitments based on a clear understanding of the client organisation’s current service delivery environment

• 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 confirming existing conditions

April 5, 2010 211

5 Outsourcing Agreements - 5.3 Negotiations

• Scope

− Plan and track negotiations with service providers

− Identify and monitor the key topics that require consensus and capture in the formal agreement between the parties

− Planning for the negotiation and clearly identifying the key topics reflects a degree of preparation that enhances internal client trust in the capabilities of the organisation, which aids in establishing positive relationships

− Outsourcing organisations should be particularly wary of security and intellectual property concerns during negotiations

• Activities

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

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

− Support the implementation of planning and tracking negotiations

April 5, 2010 212

5 Outsourcing Agreements - 5.4 Agreement Roles

• Scope

− Define the roles and responsibilities of the client organisation and the service provider under the proposed agreement

− Having clearly defined and understood roles and responsibilities helps to guard against mismatched expectations that may result in service delivery issues

• Activities

− Provide support for creating and maintaining the work products and tasks for defining the roles and responsibilities of the client organisation and the service provider under the proposed agreement

− Document and implement the work products and tasks required for defining the roles and responsibilities of the client organisation and the service provider under the proposed agreement

− Support the implementation of defining the roles and responsibilities of the client organisation and the service provider under the proposed agreement

April 5, 2010 213

5 Outsourcing Agreements - 5.5 Define SLAs and Measures

• Scope− Define the formal service level agreements and performance measures for the

services and service conditions− Performance measures need to be established for each important component

of the outsourced activity− Defining the performance measures allows the service provider to rationalise

resources to best meet the client needs and allows the client to ensure that business requirements are being met

− Greatest cause of disputes is the gap in understanding between the results expected by the client and the level of service the service provider intends to provide


defining the formal service level agreements and performance measures for the services and service conditions

− Document and implement the work products and tasks required for defining the formal service level agreements and performance measures for the services and service conditions

− Support the implementation of defining the formal service level agreements and performance measures for the services and service conditions

April 5, 2010 214

5 Outsourcing Agreements - 5.6 Create Agreements

• Scope

− Establish and implement procedures to create agreements

− Legal agreements 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 creating well-formed agreements and flexibility in the relationship between the client organisation and the service provider are critical to success

• Activities

− Provide support for creating and maintaining the procedures for creating agreements

− Document and implement the procedures required for creating agreements

− Support the implementation of creating agreements

April 5, 2010 215

5 Outsourcing Agreements - 5.7 Amend Agreements

• Scope

− Establish and implement procedures to amend agreements

−Given the long-term nature of most outsourcing engagements, implementing procedures for amending agreements and flexibility in the relationship between the client and the service provider are critical to success

• Activities

− Provide support for creating and maintaining the procedures for amending agreements

−Document and implement the procedures required for amending agreements

− Support the implementation of amending agreements

April 5, 2010 216

6 Service Transfer - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 217

6 Service Transfer - 6.1 Service Transition

• Scope− Plan and track the transition of the outsourced service

− Planning is critical for establishing expectations for both the client and service provider

− Forms the basis for tracking transition and deployment tasks andfor reviewing and verifying the service design

• Activities− Provide support for creating and maintaining the work products

and tasks for planning and tracking the transition of the outsourced service

−Document and implement the work products and tasks required for planning and tracking the transition of the outsourced service

− Support the implementation of planning and tracking the transition of the outsourced service

April 5, 2010 218

6 Service Transfer - 6.2 Verify Design

• Scope− Establish and implement procedures to review and verify the

outsourced service design

− Removing defects early prevents problems during service deployment and enables the service provider to satisfy the client’s requirements and meet the service level commitments

− Establish an in-depth and rigorous review of the service design

• Activities− Provide support for creating and maintaining the procedures for

reviewing and verifying the outsourced service design

−Document and implement the procedures required for reviewing and verifying the outsourced service design

− Support the implementation of reviewing and verifying the outsourced service design

April 5, 2010 219

6 Service Transfer - 6.3 Resources Transferred Out

• Scope

− Establish and implement procedures to verify and account for resources transferred to service providers

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

− Enables the client organisation to verify the transfer of the required resources and to facilitate handling any disputes regarding disposition of resources that might arise at completion

• Activities

− Provide support for creating and maintaining the procedures for verifying and accounting for resources transferred to service providers

− Document and implement the procedures required for verifying andaccounting for resources transferred to service providers

− Support the implementation of verifying and accounting for resources transferred to service providers

April 5, 2010 220

6 Service Transfer - 6.4 Personnel Transferred Out

• Scope

− Establish and implement procedures to manage the transfer of personnel to service providers

• Activities

− Provide support for creating and maintaining the procedures for managing the transfer of personnel to service providers

−Document and implement the procedures required for managing the transfer of personnel to service providers

− Support the implementation of managing the transfer of personnel to service providers

April 5, 2010 221

6 Service Transfer - 6.5 Knowledge Transferred Out

• Scope− Ensure that transfer of knowledge to service providers is planned, supported

and verified

− Verification that knowledge transfer has successfully occurred can eliminate sources of doubt or confusion as the service moves into delivery

− Comprehensive and detailed documentation of transferred knowledge also makes it easier for a client to bring the service delivery back in-house or transition to another service provider


ensuring that transfer of knowledge to service providers is planned, supported and verified

− Document and implement the work products and tasks required for ensuring that transfer of knowledge to service providers is planned, supported and verified

− Support the implementation of ensuring that transfer of knowledge to service providers is planned, supported and verified

April 5, 2010 222

7 Sourced Services Management - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 223

7 Sourced Services Management - 7.1 Perform Outsourcing Management

• Scope

− Plan and track outsourcing management for the outsourced services

− Well-defined plan for governance and service management is necessary to ensure the client organisation’s success in managing and monitoring service providers

− Planning and tracking are key aspects of service management for the outsourced services that occur throughout delivery

• Activities

− Provide support for creating and maintaining the work products and tasks for planning and tracking outsourcing management for the outsourced services

− Document and implement the work products and tasks required for planning and tracking outsourcing management for the outsourced services

− Support the implementation of planning and tracking outsourcing management plans for the outsourced services

April 5, 2010 224

7 Sourced Services Management - 7.2 Performance Monitoring

• Scope

− Establish and implement procedures to monitor and verify that service commitments are being met

− Verify that the agreed upon service commitments are being met and take appropriate action which may include exercising remedies in the agreement when commitments are not met or are in jeopardy of being missed

− Goal of the procedures is to optimise the cost of monitoring and conformance by generating maximum compliance with minimum cost

• Activities

− Provide support for creating and maintaining the procedures for monitoring and verifying service commitments

− Document and implement the procedures required for monitoring and verifying service commitments

− Support the implementation of monitoring and verification of service commitments

April 5, 2010 225

7 Sourced Services Management - 7.3 Financial Management

• Scope

− Establish and implement procedures for financial management of the outsourced services

− Procedures allow the client organisation to develop and maintain cost controls, manage the costs of performing outsourcing management, evaluate financial impact of changes to agreements, clearly understand costs, develop and distribute financial reports and resolve financial issues

• Activities

− Provide support for creating and maintaining the procedures for financial management of the outsourced services

− Document and implement the procedures required for the financialmanagement of the outsourced services

− Support the implementation of financial management of the outsourced service

April 5, 2010 226

7 Sourced Services Management - 7.4 Agreement Management

• Scope− Establish and implement procedures for management of

agreements governing the outsourced services

−Manage organisational understanding of key elements of agreements, as appropriate, such as definitions, service activity and task descriptions, service performance levels, problem escalation definitions and service conditions


management of agreements governing the outsourced services

−Document and implement the procedures required for management of agreements governing the outsourced services

− Support the implementation of management of agreements governing the outsourced services

April 5, 2010 227

7 Sourced Services Management - 7.5 Problem and Incident Monitoring

• Scope

− Participate in problem and incident monitoring and resolution

− Monitor the service provider’s adherence to problem severity management as well as participating with the service provider in understanding and resolving problems

− Establish the need for and implement a reporting process for issues raised by internal stakeholders, such as end users

• Activities

− Provide support for creating and maintaining the work products and tasks for participating in problem and incident monitoring and resolution

− Document and implement the work products and tasks required for participating in problem and incident monitoring and resolution

− Support the implementation of participation in problem and incident monitoring and resolution

April 5, 2010 228

7 Sourced Services Management - 7.6 Service Delivery Change Management

• Scope

− Participate in change management activities

− Manage modifications of the services in a controlled manner in order to minimise the impact on their delivery, including ensuring that retained services remain synchronised with outsourced services as service changes are implemented

− Change management is focused on ensuring that all changes are assessed, approved, implemented and reviewed in a controlled manner

• Activities

− Provide support for creating and maintaining the work products and tasks for participating in change management activities

− Document and implement the work products and tasks required for participating in change management activities

− Support the implementation of participation in change management activities

April 5, 2010 229

7 Sourced Services Management - 7.7 Service Change Management

• Scope

− Establish and implement procedures to manage modifications to services

− Major business changes, due to growth, business mergers, acquisitions and reorganisations and changing customer requirements, can require service levels to be adjusted, redefined, or even temporarily suspended

− Effective service management disciplines help ensure that the effect of changes to one area of the infrastructure or business process are identified prior to the change, that changes are planned and that back out plans are in place

• Activities

− Provide support for creating and maintaining the procedures for managing modifications to services

− Document and implement the procedures required for managing modifications to services

− Support the implementation of managing modifications to services

April 5, 2010 230

7 Sourced Services Management - 7.8 Review Service Performance

• Scope

− Establish and implement procedures for reconciling service performance against expectations

− Manage the performance of service providers in order to help ensure that the client organisation receives the agreed-to service

− Effective management includes identifying deviations in the performance of service providers and taking the appropriate corrective action to assure expected service delivery

• Activities

− Provide support for creating and maintaining the procedures for reconciling service performance against expectations

− Document and implement the procedures required for reconciling service performance against expectations

− Support the implementation of reconciling service performance against expectations

April 5, 2010 231

7 Sourced Services Management - 7.9 Stakeholder Feedback

• Scope

− Establish and implement guidelines to collect and organise stakeholder inputs and feedback

− Collect, organise and use stakeholder information in order to improve service delivery, outsourcing management and relationships with stakeholders

• Activities

− Provide support for creating and maintaining the guidelines for collecting and organising stakeholder inputs and feedback

−Document and implement the guidelines required for collecting and organising stakeholder inputs and feedback

− Support the implementation of collecting and organising stakeholder inputs and feedback

April 5, 2010 232

7 Sourced Services Management - 7.10 Service Value Analysis

• Scope− Establish and implement procedures for performing value analysis

of the outsourced service

− Expected value propositions for the outsourcing action and theirexpected outcomes must be well defined and documented

− State value propositions as outcomes or goals that are quantifiable and measurable


performing value analysis of the outsourced service

−Document and implement the procedures required for performing value analysis of the outsourced service

− Support the implementation of performing value analysis of the outsourced service

April 5, 2010 233

7 Sourced Services Management - 7.11 Continuation Decision

• Scope− Establish and implement procedures for making decisions about continuing the

outsourced service

− A procedure to reconcile provider performance against expectations as a trend over time will lead to fact-based decisions for fine tuning the services delivered and eventually for future outsourcing decisions between outsourcing options

− Outsourcing decision may include continued delivery of the outsourced service with no changes, identifying necessary amendments to agreements, renewing agreements for an extended duration, or terminating the agreements that are currently in place

• Activities− Provide support for creating and maintaining the procedures for making

decisions about continuing the outsourced service

− Document and implement the procedures required for making decisions about continuing the outsourced service

− Support the implementation of making decisions about continuing the outsourced service

April 5, 2010 234

8 Outsourcing Completion - ActivitiesOutsourcing








6 Service Transfer

Completion Phase








2.2 Business Case











Providers




5.3 Negotiations

5.4 Agreement Roles





6.2 Verify Design





Management














Provider


Provider


Provider

April 5, 2010 235

8 Outsourcing Completion - 8.1 Completion Planning

• Scope− Plan and track completion of the outsourced service

− In addition to making sure that financial and other substantive commitments are identified and met, client organisations should pay attention to the health of the relationship so as to make it possible for both parties to separate amicably

− For services transitioning to another service provider, the completion plans may need to be closely aligned with the transition plans developed by the client and the incumbent service provider


planning and tracking completion of the outsourced service

− Document and implement the work products and tasks required for planning and tracking completion of the outsourced service

− Support the implementation of planning and tracking the completion of the outsourced service

April 5, 2010 236

8 Outsourcing Completion - 8.2 Service Continuity

• Scope

− Establish and implement procedures to ensure the continuity of service during completion

− Facilitating and monitoring the transfer of service helps ensurethat the client’s business is not disrupted

• Activities

− Provide support for creating and maintaining the procedures for ensuring the continuity of service during completion

−Document and implement the procedures required for ensuring the continuity of service during completion

− Support the implementation of ensuring the continuity of serviceduring completion

April 5, 2010 237

8 Outsourcing Completion - 8.3 Resources Transfer from Service Provider

• Scope

− Ensure that resource transfer during completion is managed according to documented procedures

− Resources to be transferred can include service-related documents, software, hardware, licenses, facilities, personnel and other assets

• Activities

− Provide support for creating and maintaining the work products and tasks for ensuring that resource transfer during completion is managed according to documented procedures

− Document and implement the work products and tasks required for ensuring that resource transfer during completion is managed according to documented procedures

− Support the implementation of resource transfer during completion

April 5, 2010 238

8 Outsourcing Completion - 8.4 Personnel Transfer from Service Provider

• Scope

− Ensure that the transfer of personnel during completion is managed according to documented procedures

• Activities

− Provide support for creating and maintaining the work products and tasks ensuring that the transfer of personnel during completion is managed according to documented procedures

−Document and implement the work products and tasks required for ensuring that the transfer of personnel during completion ismanaged according to documented procedures

− Support the implementation of transfer of personnel during completion

April 5, 2010 239

8 Outsourcing Completion - 8.5 Knowledge Transfer from Service Provider

• Scope− Ensure that knowledge transfer during completion is managed

according to documented procedures

− Knowledge the service provider gained during the engagement may represent the client organisation’s intellectual property


and tasks for ensuring that knowledge transfer during completionis managed according to documented procedures

−Document and implement the work products and tasks required for ensuring that knowledge transfer during completion is managed according to documented procedures

− Support the implementation of knowledge transfer during completion

April 5, 2010 240

9 Outsourcing Strategy Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 241

9 Outsourcing Strategy Management - 9.1 Outsourcing Sponsorship

• Scope

− Establish management sponsorship for outsourcing

− Ensuring that the correct level of senior management supports and is committed to the outsourcing initiatives is critical for client organisations, as outsourcing is often en a strategic initiative that crosses functional groups within the client organisation

− Sponsorship should be established at the appropriate level to have the necessary scope and strategic perspective for the outsourcing activities

• Activities

− Provide support for creating and maintaining the work products and tasks for establishing management sponsorship for outsourcing

− Document and implement the work products and tasks required for establishing management sponsorship for outsourcing

− Support the implementation of establishing management sponsorship for outsourcing

April 5, 2010 242

9 Outsourcing Strategy Management - 9.2 Outsourcing Constraints

• Scope− Identify the constraints that impact the client organisation’s

potential uses of outsourcing

−Understand the strategic, political and managerial implications of outsourcing


and tasks for determining the constraints that impact the clientorganisation’s potential uses of outsourcing

−Document and implement the work products and tasks required for determining the constraints that impact the client organisation’s potential uses of outsourcing

− Support the implementation of determining the constraints that impact the client organisation’s potential uses of outsourcing

April 5, 2010 243

9 Outsourcing Strategy Management - 9.3 Potential Outsourcing Areas

• Scope

− Decide to what extent outsourcing may be relevant to the client organisation

− Examine the organisation’s business strategies and plans and determine which business processes, skills or competencies are better handled by others, leaving the client to concentrate on its own core competencies

• Activities

− Provide support for creating and maintaining the work products and tasks for determining to what extent outsourcing may be relevant to the client organisation

− Document and implement the work products and tasks required for determining to what extent outsourcing may be relevant to the client organisation

− Support the implementation of determining to what extent outsourcing may be relevant to the client organisation

April 5, 2010 244

9 Outsourcing Strategy Management - 9.4 Outsourcing Objectives

• Scope− Define, align and document outsourcing objectives

− Outsourcing objectives set will reflect the underlying motives for the organisation considering outsourcing as an appropriate business strategy

− Clearly defined and measurable outsourcing objectives establish the outsourcing principles and enable management to set and attain performance expectations

− Outsourcing objectives should be clearly established and supported, aligned with IT and business objectives and support achieving these business objectives


developing, aligning and documenting outsourcing objectives

− Document and implement the work products and tasks required for developing, aligning and documenting outsourcing objectives

− Support the implementation of developing, aligning and documenting outsourcing objectives

April 5, 2010 245

9 Outsourcing Strategy Management - 9.5 Organisational Outsourcing Strategy

• Scope

− Define, communicate and maintain the outsourcing strategy of the client organisation

− Outsourcing strategy should clearly address the client organisation’s outsourcing objectives and be in alignment with the organisation’s business, growth and continuity strategies

− Outsourcing objectives set will reflect the underlying motives for the organisation considering outsourcing as an appropriate business strategy

• Activities

− provide support for creating and maintaining the work products and tasks for developing and managing the outsourcing strategy of the client organisation

− Document and implement the work products and tasks required for developing and managing the outsourcing strategy of the client organisation

− Support the implementation of developing and managing the outsourcing strategy of the client organisation

April 5, 2010 246

10 Governance Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 247

10 Governance Management - 10.1 Outsourcing Policy

• Scope

− Establish and implement the organisational outsourcing policy

− Provides the organisational structures, processes and mechanisms needed to manage, assess and improve the client organisation’s outsourcing initiatives and support the outsourcing strategy

− Governance policy should enable effective execution of the key client outsourcing activities

− Demonstrates leadership and organisational commitment and is a key factor for outsourcing success

• Activities

− Provide support for creating and maintaining the organisational outsourcing policy

− Document and implement the organisational outsourcing policy

− Support the implementation of the organisation’s outsourcing policy

April 5, 2010 248

10 Governance Management - 10.2 Service Provider Management

• Scope− Establish and implement procedures to manage service providers

−Having effective relationships with service providers helps the outsourcing organisation expand its capabilities and respond to internal clients’ changing requirements and demands

− Includes tracking the performance of service provider

− Should be proactive and collaborative, with customers and their service providers working together to resolve issues


managing service providers

−Document and implement the procedures required for managing service providers

− Support the implementation of managing service providers

April 5, 2010 249

10 Governance Management - 10.3 Internal Stakeholder Management

• Scope

− Establish and implement procedures to manage internal stakeholders

−Having procedures to manage the relationships with internal stakeholders helps the outsourcing organisation ensure that outsourced services meet internal needs and respond to internal clients’ changing demands

• Activities

− Provide support for creating and maintaining the procedures for managing internal stakeholders

−Document and implement the procedures required for managing internal stakeholders

− Support the implementation of managing internal stakeholders

April 5, 2010 250

10 Governance Management - 10.4 Defined Outsourcing Processes

• Scope− Establish and maintain documented outsourcing processes for use across the

organisation

− Processes help to ensure mechanisms are in place to manage relationships with service providers while meeting the client’s organisational outsourcing objectives

− Without appropriate outsourcing processes in place, the problems may fail to be identified or managed adequately

− Well-developed and implemented outsourcing processes enables the client organisation to integrate and institutionalise best practices of planning, organising, acquiring, implementing, delivering, supporting and monitoring outsourcing performance, to ensure that the client’s outsourcing activities support its business objectives


establishing and maintaining documented outsourcing processes for use across the organisation

− Document and implement the work products and tasks required for establishing and maintaining documented outsourcing processes for use across the organisation

− Support the implementation of establishing and maintaining documented outsourcing processes for use across the organisation

April 5, 2010 251

10 Governance Management - 10.5 Align Strategy and Architectures

• Scope− Align strategies and architectures to support outsourcing across the

organisation− Engaging in outsourcing activities without ensuring that they are consistent

with the client organisation’s strategy and architectures can lead to significant risk, potential impacts on service delivery and performance and introduce unnecessary issues in service transfer

− Continual monitoring of technological advances and regulatory trends will ensure that the organisation’s technology architecture remains capable of supporting business process and outsourcing needs


aligning strategies and architectures to support outsourcing across the organisation

− Document and implement the work products and tasks required for aligning strategies and architectures to support outsourcing across the organisation

− Support the implementation of aligning strategies and architectures to support outsourcing across the organisation

April 5, 2010 252

10 Governance Management - 10.6 Business Process Integration

• Scope

− Establish and implement procedures to manage the integration of business processes with those performed by service providers

− IT-enabled outsourcing requires that the client organisation’s business processes be integrated with those of the service provider

− Processes must be coordinated between all the involved parties to achieve the agreed-to performance and service levels

• Activities

− Provide support for creating and maintaining the procedures for managing the integration of business processes with those performed by service providers

− Document and implement the procedures required for managing the integration of business processes with those performed by service providers

− Support the implementation of managing the integration of business processes with those performed by service providers

April 5, 2010 253

10 Governance Management - 10.7 Adapt to Business Change

• Scope

− Establish and implement guidelines for reviewing and adapting to changes

− Processes should be constantly reviewed and refined to ensure that all activities add value appropriately

− In order to achieve the maximum benefits of outsourcing, organisations should review their agreements and rectify any issues that have emerged due to change in business needs or constraints

• Activities

− Provide support for creating and maintaining the guidelines for reviewing and adapting to changes

− Document and implement the guidelines required for reviewing and adapting to changes

− Support the implementation of reviewing and adapting to changes

April 5, 2010 254

11 Relationship Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 255

11 Relationship Management - 11.1 Service Provider Interactions

• Scope− Establish and implement procedures to manage interactions with

service providers

− Providing a common point of contact such as a service provider relationship team helps ensure the continuity of communication

− Team should be maintained throughout the outsourcing life-cycle


managing interactions with service providers

−Document and implement the procedures required for managing interactions with service providers

− Support the implementation of managing interactions with service providers

April 5, 2010 256

11 Relationship Management - 11.2 Service Provider Relationships

• Scope

− Establish and implement procedures to manage service provider relationships

− Having effective procedures to manage service provider relationships with existing service providers helps the client organisation to communicate their changing needs and to proactively determine how to address them while also addressing the organisation’s objectives

− Interface between the client organisation and its service providers is crucial to successful outcomes

• Activities

− Provide support for creating and maintaining the procedures for managing service provider relationships

− Document and implement the procedures required for managing service provider relationships

− Support the implementation of managing service provider relationships

April 5, 2010 257

11 Relationship Management - 11.3 Internal Relationships

• Scope

− Establish and implement procedures to manage internal client relationships

− Effective collection, analysis and tracking of internal client interactions enables the creation of an extensive record that can provide insight into internal client requirements and needs

− Having effective relationships with internal clients helps the outsourcing organisation to understand the internal clients’ changing needs

• Activities

− Provide support for creating and maintaining the procedures for managing internal client relationships

− Document and implement the procedures required for managing internal client relationships

− Support the implementation of managing internal client relationships

April 5, 2010 258

11 Relationship Management - 11.4 Issue Management

• Scope

− Establish and implement procedures to manage issues and their resolution

− Issue management covers identification, documentation, escalation, negotiation and dispute and conflict resolution of issues amongst the client organisation, internal stakeholders and the service provider

− Effective issue management requires that negotiation and resolution techniques between the client and service provider organisations be standardised as a common repeatable issue management process

• Activities

− Provide support for creating and maintaining the procedures for managing issues and their resolution

− Document and implement the procedures required for managing issues and their resolution

− Support the implementation of managing issues and their resolution

April 5, 2010 259

11 Relationship Management - 11.5 Cultural Fit

• Scope

− Identify cultural attributes that impact the outsourcing relationship and the outsourced services and implement actions to achieve cultural fit

− Addressing cultural differences also improves stakeholder satisfaction and enables all involved personnel to work together effectively

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying cultural attributes that impact the outsourcing relationship and the outsourced services and implementing actions to achieve cultural fit

− Document and implement the work products and tasks required for identifying cultural attributes that impact the outsourcing relationship and the outsourced services and implementing actions to achieve cultural fit

− Support the implementation of identifying cultural attributes that impact the outsourcing relationship and the outsourced services and implementing actions to achieve cultural fit

April 5, 2010 260

11 Relationship Management - 11.6 Collaborative Relationships

• Scope− Establish and implement guidelines for developing collaborative

relationships with service providers

−A key to successfully managing outsourcing during long-term relationships is building trust and collaboration, which goes beyond an agreement’s legal requirements to explore new ways that clients and service providers can engage in win-win activities

• Activities− Provide support for creating and maintaining the guidelines for

developing collaborative relationships with service providers

−Document and implement the guidelines required for developing collaborative relationships with service providers

− Support the implementation of developing collaborative relationships with service providers

April 5, 2010 261

11 Relationship Management - 11.7 Innovative Relationships

• Scope

− Develop relationships that focus on value creation through innovation

− Value creation includes identifying opportunities of greater business value for the client, including innovations such as new business arrangements or enhanced technologies and other opportunities for creating value or making improvements

• Activities

− Provide support for creating and maintaining the work products and tasks for developing relationships that focus on value creation through innovation

− Document and implement the work products and tasks required for developing relationships that focus on value creation through innovation

− Support the implementation of developing relationships that focus on value creation through innovation

April 5, 2010 262

12 Value Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 263

12 Value Management - 12.1 Organisational Outsourcing Performance

• Scope

− Establish and implement procedures to review organisational outsourcing performance

− Organise key performance measurements across the client organisation in order to manage and improve organisational outsourcing performance

− Client organisations need to manage their outsourcing activities by identifying and utilising measures or indicators that best represent the factors that lead to improved customer, operational and financial performance

• Activities

− Provide support for creating and maintaining the procedures for reviewing organisational outsourcing performance across the organisation

− Document and implement the procedures required for reviewing organisational outsourcing performance across the organisation

− Support the implementation of reviewing organisational outsourcing performance across the organisation

April 5, 2010 264

12 Value Management - 12.2 Capability Baselines

• Scope

− Define capability baselines for the client organisation by organising outsourcing performance data

− Provides a basis for the outsourcing organisation to organise whether performance deviations are within expected ranges or if they represent exceptions that need to be investigated and addressed

• Activities

− Provide support for creating and maintaining the work products and tasks for defining capability baselines for the client organisation

− Document and implement the work products and tasks required for defining capability baselines for the client organisation

− Support the implementation of defining capability baselines for the client organisation

April 5, 2010 265

12 Value Management - 12.3 Benchmark Outsourcing Processes

• Scope− Benchmark the client organisation’s outsourcing-related processes by

comparing performance with other client organisations involved in similar relationships

− Benchmarking allows the client organisation to objectively organise its outsourcing processes

− Measure the performance of the organisation’s processes and compares them to the measured performance of industry best practices

− Compare the organisation’s processes to industry best practices in order to identify the practices that lead to superior performance

− Compare the organisation’s processes against standards or models


benchmarking the client organisation’s outsourcing-related processes− Document and implement the work products and tasks required for

benchmarking the client organisation’s outsourcing-related processes− Support the implementation of benchmarking the client organisation’s

outsourcing-related processes

April 5, 2010 266

12 Value Management - 12.4 Improve Outsourcing Processes

• Scope

− Improve outsourcing-related processes based on reviews of organisational outsourcing performance

− Use the knowledge gained from performance reviews in order to improve the organisation’s outsourcing performance and increase the stakeholders’ value

• Activities

− Provide support for creating and maintaining the work products and tasks for making improvements based on reviews of organisational outsourcing performance

− Document and implement the work products and tasks required for making improvements based on reviews of organisational outsourcing performance

− Support the implementation of making improvements based on reviews of organisational outsourcing performance

April 5, 2010 267

12 Value Management - 12.5 Innovation

• Scope− Establish and implement programs to encourage and deploy innovations

through outsourcing relationships and outsourced services across the organisation

− Innovations may spring from many sources: people, markets and service providers, as well as reviews of ongoing outsourcing performance

− Major changes that affect the organisation need to be actively managed because of the learning curve and potential impacts associated with the change


establishing and implementing programs to encourage and deploy innovations through outsourcing relationships and outsourced services across the organisation

− Document and implement the work products and tasks required for establishing programs to encourage and deploy innovations through outsourcing relationships and outsourced services across the organisation

April 5, 2010 268

12 Value Management - 12.6 Business Value and Impact

• Scope−Organise the business value and impact of organisational

outsourcing performance

− Evaluate the client organisation’s outsourcing capability and its contribution to business value and impacts


and tasks for organising the business value and impact of organisational outsourcing performance

−Document and implement the work products and tasks required for organising the business value and impact of organisational outsourcing performance

− Support the implementation of organising the business value and impact of organisational outsourcing performance

April 5, 2010 269

12 Value Management - 12.7 Outsourcing Alignment

• Scope− Align the client organisation’s outsourcing activities and results with its

business objectives and strategy

− Enhance the alignment of outsourcing results across the organisation and with organisational performance and business objectives

− Analyses allow management to align outsourcing performance across the entire organisation and to use their outsourcing activities strategically to achieve organisational business objectives


ensuring alignment of outsourcing activities and results with business objectives and strategy

− Document and implement the work products and tasks required for ensuring alignment of outsourcing activities and results with business objectives and strategy

− Support the implementation of ensuring alignment of outsourcing activities and results with business objectives and strategy

April 5, 2010 270

13 Organisational Change Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 271

13 Organisational Change Management - 13.1 Prepare for Organisational Change

• Scope− Prepare for changes across the organisation needed to support the client

organisation’s outsourcing actions

− Assess the client organisation’s readiness for change and determine the gaps that need to be closed to ensure a successful transition to a new service delivery model

− Outsourcing can have significant change implications for an organisation


preparing for organisational change needed to support the clientorganisation’s outsourcing actions

− Document and implement the work products and tasks required for preparing for organisational change needed to support the client organisation’s outsourcing actions

− Support the implementation of preparing for organisational change needed to support the client organisation’s outsourcing activities

April 5, 2010 272

13 Organisational Change Management - 13.2 Stakeholder Involvement

• Scope

− Identify and involve relevant stakeholders in outsourcing activities

• Activities

− Provide support for creating and maintaining the work products and tasks for identifying and involving relevant stakeholders inoutsourcing activities

−Document and implement the work products and tasks required for identifying and involving relevant stakeholders in outsourcing activities

April 5, 2010 273

13 Organisational Change Management - 13.3 Define Future State

• Scope

−Define the future organisational structure and process model

−Organisational structure and its process architecture must be defined in order to establish the business model that will be implemented

• Activities

− Provide support for creating and maintaining the work products and tasks for defining the future organisational structure and process model

−Document and implement the work products and tasks required for defining the future organisational structure and process model

− Support the implementation of defining the future organisationalstructure and process model

April 5, 2010 274

13 Organisational Change Management - 13.4 Human Resource Changes

• Scope− Establish and implement human resource strategies and plans to support the

client organisation’s outsourcing actions

− Address the workforce transformations that may occur as a result of outsourcing activities

− Management should develop effective action plans to deal with personnel issues during its outsourcing activities


establishing and implementing human resource strategies and plans to support the client organisation’s outsourcing actions

− Document and implement the work products and tasks required for establishing and implementing human resource strategies and plans to support the client organisation’s outsourcing actions

− Support the implementation of establishing and implementing human resource strategies and plans to support the client organisation’s outsourcing actions

April 5, 2010 275

13 Organisational Change Management - 13.5 Communicate Organisational Changes

• Scope− Establish and implement communications strategies and plans to support the

client organisation’s outsourcing actions

− Define and explain the compelling need for a potential outsourcing action

− Business justification of a potential outsourcing action should be communicated clearly and early in the effort


establishing and implementing communications strategies and plans to support the client organisation’s outsourcing actions

− Document and implement the work products and tasks required for establishing and implementing communications strategies and plans to support the client organisation’s outsourcing actions

− Support the implementation of establishing and implementing communications strategies and plans to support the client organisation’s outsourcing actions

April 5, 2010 276

13 Organisational Change Management - 13.6 Organisational Change

• Scope

− Manage organisational change to support outsourcing actions

− New service delivery model that outsourcing brings to an organisation impacts all stakeholders - employees, users and support groups

− Change management captures the impact of outsourcing on various human or “soft” dimensions of the organisation throughout a outsourcing engagement and then enables addressing these issues

• Activities

− Provide support for creating and maintaining the work products and tasks for managing organisational change to support outsourcing actions

− Document and implement the work products and tasks required for managing organisational change to support outsourcing actions

− Support the implementation of managing organisational change to support outsourcing actions

April 5, 2010 277

14 People Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 278

14 People Management - 14.1 Assign Outsourcing Responsibilities

• Scope

− Assign roles and responsibilities to outsourcing personnel based on appropriate personnel competencies

− Having qualified personnel helps to ensure that work can be performed

− Personnel competency is the combination of knowledge, skills and process abilities that specific personnel in the client organisation possess

• Activities

− Provide support for creating and maintaining the work products and tasks for assigning roles and responsibilities to outsourcing personnel based on appropriate personnel competencies

− Document and implement the work products and tasks required for assigning roles and responsibilities to outsourcing personnel based on appropriate personnel competencies

− Support the implementation of assigning roles and responsibilities to outsourcing personnel based on appropriate personnel competencies

April 5, 2010 279

14 People Management - 14.2 Personnel Competencies

• Scope− Develop personnel competencies needed by individuals with outsourcing

responsibilities to perform their assignments− Address personnel competency gaps in order to enable personnel to effectively

perform their roles and responsibilities− Effective training helps to ensure that personnel can perform their assigned

roles and responsibilities− Training requirements must be identified to satisfy the needs of both the

outsourcing engagement and the client’s outsourcing objectives


developing personnel competencies needed by individuals with outsourcing responsibilities to perform their assignments

− Document and implement the work products and tasks required for developing personnel competencies needed by individuals with outsourcing responsibilities to perform their assignments

− Support the implementation of developing personnel competencies needed by individuals with outsourcing responsibilities to perform their assignments

April 5, 2010 280

14 People Management - 14.3 Organisational Outsourcing Competency

• Scope− Define and manage a workforce competency focused on outsourcing across

the organisation− Organisation must develop a workforce competency in organising, planning,

managing and evaluating outsourcing activities− Failure to address the knowledge, skill and competency needs of those

involved in outsourcing and governance activities exposes the organisation to risks that could be prevented by having a knowledgeable and competent outsourcing workforce


defining and managing a workforce competency focused on outsourcing across the organisation

− Document and implement the work products and tasks required for defining and managing a workforce competency focused on outsourcing across the organisation

− Support the implementation of defining and managing a workforce competency focused on outsourcing across the organisation

April 5, 2010 281

14 People Management - 14.4 Define Roles

• Scope− Define and communicate the roles and responsibilities of outsourcing

personnel across the organisation

− Clearly define the roles, responsibilities and authority of outsourcing personnel, as part of the overall outsourcing process, in order to enable them to effectively perform their assigned work

− Aligning outsourcing personnel’s roles, responsibilities and authority with client organisational objectives should result in improved performance


defining and communicating the roles and responsibilities of outsourcing personnel across the organisation

− Document and implement the work products and tasks required for defining and communicating the roles and responsibilities of outsourcing personnel across the organisation

− Support the implementation of defining and communicating the roles and responsibilities of outsourcing personnel across the organisation

April 5, 2010 282

15 Knowledge Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 283

15 Knowledge Management - 15.1 Provide Required Information

• Scope− Identify, control and provide the information that personnel need to perform

their outsourcing responsibilities

− Provide access to the information that is essential for personnel to do their work in order to enable personnel to work efficiently

− Easy access to required information enables personnel to be more efficient and effective in the performance of their work


identifying, controlling and providing the information that personnel need to perform their outsourcing responsibilities

− Document and implement the work products and tasks required for identifying, controlling and providing the information that personnel need to perform their outsourcing responsibilities

− Support the implementation of identifying, controlling and providing the information that personnel need to perform their outsourcing responsibilities

April 5, 2010 284

15 Knowledge Management - 15.2 Knowledge System

• Scope

− Utilise a knowledge system to identify, control and disseminate outsourcing information

− A knowledge system is not necessarily a central electronic repository of information, but is rather a coordinated method for managing andcommunicating needed information

• Activities

− Provide support for creating and maintaining the work products and tasks for utilising a knowledge system to identify, control and disseminate outsourcing information

− Document and implement the work products and tasks required for utilising a knowledge system to identify, control and disseminate outsourcing information

− Support the implementation of utilising a knowledge system to identify, control and disseminate outsourcing information

April 5, 2010 285

15 Knowledge Management - 15.3 Market Information

• Scope

−Organise and use information about the service provider market

− Information includes the service provider’s industry market share, external delivery partners and their existing clients

• Activities

− Provide support for creating and maintaining the work products and tasks for organising and using information about the serviceprovider market

−Document and implement the work products and tasks required for organising and using information about the service provider market

− Support the implementation of organising and using information about the service provider market

April 5, 2010 286

15 Knowledge Management - 15.4 Lessons Learned

• Scope

− Organise and use knowledge gained from outsourcing activities

− Effectively organising and using the knowledge gained from prior and current initiatives enables clients to reuse its best practices, to address problems that have occurred and to improve overall value obtained through current and future initiatives

• Activities

− Provide support for creating and maintaining the work products and tasks for organising and using knowledge gained from outsourcing activities

− Document and implement the work products and tasks required for organising and using knowledge gained from outsourcing activities

− Support the implementation of organising and using knowledge gained from outsourcing activities

April 5, 2010 287

15 Knowledge Management - 15.5 Share Knowledge

• Scope− Establish and implement procedures to share knowledge among

stakeholders

− Knowledge sharing procedures also clarify the rules by which knowledge can be shared between internal stakeholders, client outsourcing personnel, service providers and their suppliers andpartners


sharing knowledge among stakeholders

−Document and implement the procedures required for sharing knowledge among stakeholders

− Support the implementation of sharing knowledge among stakeholders

April 5, 2010 288

16 Technology Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 289

16 Technology Management - 16.1 Asset Management

• Scope

− Ensure that technology assets are managed according to documented procedures

• Activities

− Provide support for creating and maintaining the work products and tasks for ensuring that technology assets are managed according to documented procedures

−Document and implement the work products and tasks required for ensuring that technology assets are managed according to documented procedures

− Support the implementation of ensuring that technology assets are managed according to documented procedures

April 5, 2010 290

16 Technology Management - 16.2 License Management

• Scope

− Ensure that technology licenses are managed according to documented procedures

• Activities

− Provide support for creating and maintaining the work products and tasks for ensuring that technology licenses are managed according to documented procedures

−Document and implement the work products and tasks required for ensuring that technology licenses are managed according to documented procedures

− Support the implementation of ensuring that technology licenses are managed according to documented procedures

April 5, 2010 291

16 Technology Management - 16.3 Technology Integration

• Scope− Establish and implement procedures to manage the client organisation’s

integration of its technology infrastructure with service providers

− Integration can range in scope from integrating with a single outsourcing initiative and one service provider to more complex cases of integrating with several initiatives and multiple service providers and their appropriate partners

− For the integration of technology infrastructure may be identified during the process of gathering requirements of a outsourcing opportunity

• Activities− Provide support for creating and maintaining the procedures for managing the

client organisation’s integration of its technology infrastructure with the service providers

− Document and implement the procedures required for managing the client organisation’s integration of its technology infrastructure with the service providers

− Support the implementation of managing the client organisation’s integration of its technology infrastructure with the service providers

April 5, 2010 292

17 Threat Management - ActivitiesOutsourcing


Ongoing Phase

Governance Focused


Environment Focused


Management



12 Value Management


Management










Strategy



Management


Management


Processes



Integration



Interactions


Relationships



11.5 Cultural Fit



12.1 Organisational




Processes


Processes

12.5 Innovation




Change





Changes

13.6 Organisational

Change


Responsibilities


14.3 Organisational


14.4 Define Roles


Information









17.2 Organisational

Risk Management



17.5 Compliance


April 5, 2010 293

17 Threat Management - 17.1 Outsourcing Risk Management

• Scope

− Establish and implement procedures to identify, assess and manage outsourcing risks

− Effective risk management is particularly critical in the early stages of a outsourcing initiative, where requirements are being organised and service is being designed to meet those requirements

− Problems encountered here can impact the success of service delivery and associated business benefits throughout the life of the initiative.

• Activities

− Provide support for creating and maintaining the procedures for identifying, assessing and managing outsourcing risks

− Document and implement the procedures required for identifying, assessing and managing outsourcing risks

− Support the implementation of identifying, assessing and managing outsourcing risks

April 5, 2010 294

17 Threat Management - 17.2 Organisational Risk Management

• Scope

− Establish and implement procedures to manage risks across multiple outsourced services and service providers

− Effective identification and assessment of risks enables the client organisation to take mitigating actions to lower the impact should a risk event occur

− Effective risk management improves the stakeholders’ confidence in the client organisation’s ability to maintain needed services and service levels

• Activities

− Provide support for creating and maintaining the procedures for managing risks across multiple outsourced services and service providers

− Document and implement the procedures required for managing risks across multiple outsourced services and service providers

− Support the implementation of managing risks across multiple outsourced services and service providers

April 5, 2010 295

17 Threat Management - 17.3 Intellectual Property

• Scope− Establish and implement procedures to protect the intellectual property of

stakeholders

− Inappropriate use or disclosure of intellectual property can damage the relationship with stakeholders, may cause financial loss and make the client organisation vulnerable to disputes or legal action

− Organisation should have a formalised policy on the protection of intellectual property that is used to provide direction for creating the procedures on protection of intellectual property

• Activities− Provide support for creating and maintaining the procedures for protecting the

intellectual property of stakeholders

− Document and implement the procedures required for protecting the intellectual property of stakeholders

− Support the implementation of protecting the intellectual property of stakeholders

April 5, 2010 296

17 Threat Management - 17.4 Security and Privacy

• Scope− Establish and implement procedures to meet security and privacy

requirements

− Breakdowns, such as security breaches, can impact the client organisation’s ability to provide business continuity, thereby damaging the relationship and making the involved parties vulnerable to legal action

− Effective security is essential for meeting privacy requirements and protecting intellectual property

− Security requirements may come from the client organisation or statutes and regulations governing the service being delivered

• Activities− Provide support for creating and maintaining the procedures for meeting

security and privacy requirements

− Document and implement the procedures required for meeting security and privacy requirements

− Support the implementation of meeting security and privacy requirements

April 5, 2010 297

17 Threat Management - 17.5 Compliance

• Scope− Establish and implement procedures to comply with applicable standards and

statutory and regulatory requirements

− Client organisation must implement procedures to address governance, risk and compliance

− Procedures ensure that they comply with standards, statutes and regulations that impact their outsourcing capability and their outsourced services in order to meet statutory, regulatory and stakeholder requirements and to avoid stakeholder dissatisfaction and legal or audit issues

• Activities− Provide support for creating and maintaining the procedures for complying

with applicable standards and statutory and regulatory requirements

− Document and implement the procedures required for complying with applicable standards and statutory and regulatory requirements

− Support the implementation of complying with applicable standards and statutory and regulatory requirements

April 5, 2010 298

17 Threat Management - 17.6 Business Continuity

• Scope− Establish and implement procedures to ensure business continuity of

outsourced services

− Prepare for possible disasters in order to minimise their impact on the client organisation’s ability to continue business activities

− Preparation covers service delivery, security, the protection of intellectual property, crisis management and the safety of personnel and promotes confidence in the client organisation’s and service providers’ ability to react effectively to adverse situations

• Activities− Provide support for creating and maintaining the procedures for ensuring

business continuity of outsourced services

− Document and implement the procedures required for ensuring business continuity of outsourced services

− Support the implementation of ensuring business continuity of outsourced services

April 5, 2010 299

Summary

• Public cloud computing has the potential to lead to a large number of new outsourcing implementations

• Outsourcing experiences and implementations has been poor

• A structured approach to implementing outsourcing arrangements by both providers and end-users can enable effective outsourcing and public cloud implementations

April 5, 2010 300

More Information

Alan McSweeney

[email protected]

Outsourcing And Cloud Computing

Business

Transcript of Outsourcing And Cloud Computing