Structured Approach to Implementing and Operating Outsourcing and Mana

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

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

Objectives:

April 3, 2011 2 Objectives Describe at a high-level a structured approach to implementing outsourcing/managed services from both service provider and end-user organisation

Scope:

April 3, 2011 3 Scope Provide a high-level view of a common set of processes to be used by service providers and end-user organisations to implement and operate an outsourcing/managed services arrangement

Topics:

April 3, 2011 4 Topics Introduction Overview Risks and Lessons Learned Principles of Outsourcing and Core Competencies Phases of Outsourcing Relationship Outsourcing for Service Providers Phases of Outsourcing Relationship Key Issues For Successful Outsourcing Key Capabilities and Constituent Practices Outsourcing for End-User Organisations Outsourcing Challenges Key Issues For Successful Outsourcing Key Capabilities and Constituent Practices

What is Outsourcing?:

April 3, 2011 5 What is Outsourcing? Outsourcing is delegating the responsibility for performing an information technology or business function to a third party You outsource because the outsourcing supplier will do: What the organisation currently does At the same or better level of performance For the same or lower price

Potential Advantages of Managed Services:

April 3, 2011 6 Potential Advantages of Managed Services Better Use of Staff : allows agencies to focus human resources on strategic planning and core mission support Cost Savings : choose not to build and support IT and network infrastructure available in the commercial sector; use limited capital to purchase needed service levels and reduce total cost of ownership Ability to Use Optimal Technologies : adjust types and mix of hardware, software, skilled labour, capital investment and technology to support changes in mission needs Rapid Response to Organisation and Business Changes : supplier is measured by ability to produce solutions

Types of Outsourcing Arrangement:

April 3, 2011 7 Types of Outsourcing Arrangement Efficiency/Utility (Make it Cheaper) arrangement outsourcing focuses primarily on cost control and, over time, cost reduction, with the goal of maintaining consistency in the delivery of services Business Enhancement (Make it Better) arrangement is about business productivity. The organisation’s performance, as compared with their competitors, will improve, resulting in movement toward defined business goals Transformational (Make me Money) arrangement is characterised by a partnership between the service provider and service recipient that is focused on innovation and new business, changing the very basis on which an organisation competes

Benefits of Managed Services:

April 3, 2011 8 Benefits of Managed Services Managed Services offers an alternative approach for a client to acquire IT or telecom support services Managed services solutions are designed and delivered by service providers according to a predefined statement of deliverables and generally includes end-to-end service, service level agreements, and assets (if desired) A managed service typically includes monthly recurring service-based pricing offering a more predictable cost approach for the client Ongoing visibility of operational performance is provided and managed through pre-agreed performance parameters (known as service-level agreements) The client may include their unique performance requirements such as degree of control and visibility, security, availability, capacity, service continuity and other requirements as it relates to the specific service Because this is a core competency, the service provider is able to optimise the best balance of facilities, processes, resources, tools, and metrics, resulting in the best overall value for the client Cost effectiveness is typically achieved through instituting process standards and establishing and supporting a standard operating environment (SOE) consisting of COTS (Commercial Off the Shelf) services and solutions Managed services can be delivered either in a BOCO (Business-owned, contractor- operated) or COCO (contractor-owned, contractor-operated) model and is largely based on client preference

Outsourcing Organisations - Developing a Vision for IT Services is Required:

April 3, 2011 9 Outsourcing Organisations - Developing a Vision for IT Services is Required What do we do today? What do our customers want us to do? What changes do we need to make to align with our customers needs? How will they pay for those services? How will we deliver those services consistently and measure their delivery? What kind of organisation (Governance/Contract Management/Structures/Staff/Skills/Service Providers) will we need to achieve it? What service management processes we should use?

Reasons Organisations Outsource:

April 3, 2011 10 Reasons Organisations Outsource

Outsourcing Experiences:

April 3, 2011 11 Outsourcing Experiences 13% to 25% of outsourcing contracts are brought in-house within the first two years Buyers replace 80% of their service contractors in the first three years Contractors turn over 40% of their contracts each year, on average Nearly 70% outsourcing organisations feel their service provider does adequately understand what they are supposed to do Not good

Key Issues For Successful Outsourcing:

April 3, 2011 12 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

Hidden Costs of Outsourcing:

April 3, 2011 13 Hidden Costs of Outsourcing Transfer of knowledge Processes and procedures Documentation Personal knowledge Quality issues and their resolution Inspection programmes Sustaining quality programmes Cost of rework Communication Poor customer service Daily operational issues

Cease's Law on the Nature of the Firm:

April 3, 2011 14 Cease's Law on the Nature of the Firm A firm will tend to expand until the cost of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market This means when it is cheaper to buy the service externally it will generally be bought externally However there is an assumption of perfect knowledge and perfectly rational use of this knowledge to achieve the most logical solution In reality this perfection is rarely if ever achieved Other less rational factors affect the decision Everybody Else Is Doing It I Want To Do It So It Appears On My Resume I Like New Technology Vendors Keep Talking About It I Need One Good Idea To Stamp My Mark On The Organization It Will Solve All My Problems I Hate Dealing With IT I Do Not Want to Setup a Large IT Function Cost estimates are rarely accurate What we know about most projects is that they either or both overrun on costs and deliver less than expected Cost overruns are generally caused by a mix of errors in the initial cost estimates and deliberate distortions in order to cause the decision to be made

Transaction Costs:

April 3, 2011 15 Transaction Costs Along with production costs, there are costs for preparing, entering into and monitoring the execution of all kinds of contracts as well as costs for implementing allocation and tracking measures for the contracted services When internal transaction costs become greater than the costs of externally sourcing the service, the service will be obtained externally There are hidden costs associated with sourcing a service externally Selecting the wrong supplier Costs of writing contract Costs of enforcing contract Having a poor service contract that results in hidden cost and/or reduced service Overlooking personnel issues Loosing control over the outsourced activity Management, quality assurance and supervision overhead Implementation and termination costs Loss of flexibility Loss of integration between applications and data Data extraction costs Security framework implementation Transition to utility computing model requires full knowledge of costs – current and future Note that anything can be outsourced except the management of what is outsourced

Outsourcing Planning:

April 3, 2011 16 Outsourcing Planning Structured approach can form the basis for an outsourcing implementation plan for both service providers and for companies performing outsourcing

Sample Service Transfer Plan – Outsourcing Service Provider:

April 3, 2011 17 Sample Service Transfer Plan – Outsourcing Service Provider Plan subset Based on activities 1 Service Transfer 1.1 Resources Transferred In 1.2 Personnel Transferred In 1.3 Service Continuity

Sample Service Transfer Plan – Outsourcing Organisation:

April 3, 2011 18 Sample Service Transfer Plan – Outsourcing Organisation Plan subset Based on activities 1 Outsourcing Opportunity Analysis 1.1 Define Current State 1.2 Outsourcing Criteria 1.3 Demand Identification 1.4 Outsourcing Options

Where Outsourcing Problems Happen:

April 3, 2011 19 Where Outsourcing Problems Happen Inadequate Preparation = Problems Start Here Flawed Service Provider Selection = Project Failure Starts Here Unclear Contract = Conflict Begins Here Wrong Performance Measurement = Management Failure Starts Here Ineffective Ongoing Management = Service Delivery Problems Start Here

Risks in Outsourcing – Lots of Them:

April 3, 2011 20 Risks in Outsourcing – Lots of Them

Strategic Risks:

April 3, 2011 21 Strategic Risks Outsourcing provider may conduct activities that are inconsistent with the overall strategic goals of the outsourcer Outsourcer fails to implement appropriate and effective oversight of the outsourcing provider Outsourcer has inadequate expertise to oversee the outsourcing provider

Reputational Risks:

April 3, 2011 22 Reputational Risks Outsourcing provider delivers a poor service Outsourcer’s customer service does not meet expectations in areas serviced by outsourcing provider Outsourcing provider practices do not comply with stated practices of outsourcer

Compliance Risks:

April 3, 2011 23 Compliance Risks Outsourcing provider does not comply with relevant laws and regulations Outsourcing provider does not comply with consumer laws Outsourcing provider has inadequate compliance systems and control

Operational Risks:

April 3, 2011 24 Operational Risks Outsourcing provider experiences technology failures that impact outsourcer Outsourcing provider has inadequate financial capacity to fulfil obligations and/or provide remedies in the event of failure or breach Outsourcing provider experiences fraud or error Outsourcer experiences difficulties or high costs in undertaking inspections

Termination Risks:

April 3, 2011 25 Termination Risks Outsourcer has no exit strategy are not in place because of from over-reliance on one provider or the loss of relevant in-house skills Ability to return services from outsourcing provider is difficult, time-consuming or costly because of a lack of staff or loss of intellectual capacity

Financial Risks:

April 3, 2011 26 Financial Risks Inadequate cost controls and charging mechanism leads to unexpectedly higher costs for outsourcer Changes to services requested from outsourcing provider are very expensive

Country Risks:

April 3, 2011 27 Country Risks Outsourcer cannot enforce contract Incorrect selection of applicable legal jurisdiction

Access Risks:

April 3, 2011 28 Access Risks Outsourcing arrangement negatively impacts ability to provide accurate and timely information There is an additional layer of complexity in understanding activities of the outsourcing provider

Concentration/Systemic Risks:

April 3, 2011 29 Concentration/Systemic Risks Concentration of services from multiple outsourcers in small number of outsourcing providers can mean lack of control by individual outsourcer and overall systemic risk

Lessons Learned from Outsourcing Problems:

April 3, 2011 30 Lessons Learned from Outsourcing Problems Smoothly Transferring Services And Resources Common cause of failure is the ineffective management of the transfer of services and resources to the service provider, leading to service delivery problems Successful service providers rigorously control the transfer of services and resources to ensure that the new service is able to adequately deliver the service and the service continuity is maintained. Maintaining Stakeholder Expectations Common source of failure in outsourcing engagements is a difference in expectations between the client, the service provider and the suppliers and partners Identifying and managing those expectations helps to ensure a common understanding of what is necessary for success Translating Implicit And Explicit Needs Into Defined Requirements With Agreed Upon Levels Of Quality Frequent cause of failure in outsourcing is that the service provider does not fully understand the needs of the client Successful service providers rigorously gather and analyse the stated and unstated needs, then translate those needs into a set of documented requirements Successful service providers also recognise that needs change over time and establish provisions for gathering and analysing modifications to their services

Lessons Learned from Outsourcing Problems:

April 3, 2011 31 Lessons Learned from Outsourcing Problems 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

Lessons Learned from Outsourcing Problems:

April 3, 2011 32 Lessons Learned from Outsourcing Problems 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

Principles of Outsourcing:

April 3, 2011 33 Principles of Outsourcing Need a comprehensive policy to guide the assessment of whether and how activities can be appropriately outsourced Senior management needs to be responsible for outsourcing policy and related overall responsibility for activities undertaken under the policy Need to establish a comprehensive outsourcing risk management programme to address the outsourced activities and the relationship with the service provider Need to ensure that outsourcing arrangements does diminish its ability to fulfil obligations to customers and stakeholders Need to conduct appropriate due diligence in selecting outsourcing service providers Outsourcing relationship needs to be governed by contract that clearly describes all material aspects of the outsourcing arrangement, including the rights, responsibilities and expectations of all parties Need to establish and maintain contingency plans, including a plan for availability and disaster recovery and regular testing of backup arrangements Need to take appropriate steps to ensure that outsourcing providers protect confidential information from intentional or inadvertent disclosure Need to be aware of the potential risks posed where the activities of multiple outsourcers entities are concentrated within a small number of outsourcing providers

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

April 3, 2011 34 Core Competencies for Exploiting Outsourcing and Managed Services for Organisations Selecting Outsourcing Sourcing – having an effective approach to outsourcing Concerned with managing the IT function like a business Supplier Management – plan, analyse and manage the ongoing relationships with suppliers Concerned with managing the IT function

Sourcing and Supplier Management:

April 3, 2011 35 Sourcing and Supplier Management Supplier Management competence and associated processes operationalises the strategic decisions taken within the Sourcing competence Supplier Management Sourcing

Sourcing and Supplier Management :

April 3, 2011 36 Sourcing Competence Supplier Management Competence Sourcing Competence Sourcing and Supplier Management Strategic Sourcing Decision Supplier Selection Contracting Governance and Partner Integration Transition Supplier Engagement Order Management (Ordering/ Delivery/ Distribution) Supplier Communications Supplier Risk Monitoring Contract Management (Payment, Penalties) Performance Measurement And Monitoring Supplier Development Evaluation Procurement of IT Services and IT Hardware/Software

Sourcing Competence:

April 3, 2011 37 Sourcing Competence Strategy Alignment Objectives and Scoping Sourcing Model Business Case Calculation Organisational Readiness Partner Selection Contracting Transition Partner integration and Governance Reevaluation Planning Cycle Sourcing Cycle

Sourcing Competence:

April 3, 2011 38 Sourcing Competence Define sourcing strategy and sourcing model Evaluate outsourcing potential of IT processes Select optimal partner(s) Manage the transition to selected partner(s) Setting the basis for a successful relationship with selected partner(s) to maximise business value contribution

Sourcing Competence Scope:

April 3, 2011 39 Sourcing Competence Scope Strategic sourcing decisions on what processes are in- or outsourced to what extent The decision on what sourcing model is applied Internal/external Onshore/nearshore/offshore Single vs. multiple vendor relationship Calculation of business cases for outsourcing projects The process of selecting the optimal partner(s) Preparation, negotiation, closing and re-evaluation of contracts with selected partner(s) Managing the transition process and setting up requirements for an enduring and successful relationship with partner(s)

Dimensions of Sourcing Competence Measurement Framework:

April 3, 2011 40 Dimensions of Sourcing Competence Measurement Framework Measure state of Sourcing competence along three dimensions Sourcing Strategy Contracting Sourcing Execution Define facets of each dimension Measure each facet in terms of: Associated processes and their state of development Scope or extent within the organisation Sourcing Strategy Contracting Sourcing Execution

Supplier Management Competence:

April 3, 2011 41 Supplier Management Competence Supplier management is concerned with the execution of the IT supplier strategy and manages the suppliers on an operational basis Supplier management operationalises the strategic decisions of IT suppliers and contracts agreed in the Sourcing competence Effective supplier management provides opportunities for cost reduction from better control of assets and people, as well as value-creation opportunities by supporting IT supplier collaboration and innovation

Supplier Management Competence Scope:

April 3, 2011 42 Supplier Management Competence Scope All activities related to managing ongoing (operational) relationship with suppliers and associated systems/ tools Analysis of existing suppliers to identify suitable ongoing engagement strategies at an individual and portfolio level Manage supplier relationship in line with evolving IT strategy Measure and monitor supplier performance from both the organisation’s own perspective and the supplier’s perspective Manage the ongoing external risks (e.g. supplier insolvency) and ongoing internal risks (e.g. unchecked SLAs) derived from the organisation’s relationships with its suppliers Long-term development of suppliers, their products and services to help them improve internally to achieve improved levels of innovation, quality and performance, and to be aligned optimally with the enterprise

Dimensions of Supplier Management Competence Measurement Framework:

April 3, 2011 43 Dimensions of Supplier Management Competence Measurement Framework Measure state of Supplier Management competence along three dimensions Supplier Alignment Relationship Management Performance And Risk Management Define facets of each dimension Measure each facet in terms of: Associated processes and their state of development Scope or extent within the organisation Supplier Alignment Relationship Management Performance And Risk Management

Phases of Outsourcing Relationship:

April 3, 2011 44 Phases of Outsourcing Relationship Ongoing Initiation Delivery Completion Analysis For outsourcing organisation For both outsourcing organisation and service provider

Phases of Outsourcing Relationship:

April 3, 2011 45 Phases of Outsourcing Relationship Phase Outsourcing Organisation Service Provider 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 Prepare for and transition to provision of service Delivery Provide service and manage and measure its provision Provide service and manage and measure its provision Completion Close-out the service after the contract ends or the service has been terminated Close-out the service after the contract ends or the service has been terminated Ongoing Management of outsourcing lifecycle Management of outsourcing lifecycle

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

April 3, 2011 46 Roles of Service Provider and Outsourcing Organisation During Phases of Outsourcing Relationship Initiation Delivery Completion Analysis Ongoing Service Provider Outsourcing Organisation Determine if outsourcing represents a business opportunity Prepare for service transition, transfer resources and personnel from outsourcing organisation and ensure service continuity Plan for outsourcing of selected services, evaluate and select a service provider, create an outsourcing agreement and transfer resources and personnel to service provider Define and agree requirements, negotiate contract, plan, design and deploy service, implement service delivery Implement the capability to manage the service provider, administer the agreement and the issues, challenges and changes that arise after the agreement has been reached, reviewing the service provider’s performance Implement knowledge management processes, perform people management, implement performance management, manage relationship, manage technology and manage risks and threats Develop outsourcing strategy management, manage relationship with service provider, ensure value, implement knowledge management processes, manage technology and manage risks and threats Prepare for service transition, transfer resources and personnel from outsourcing organisation and ensure service continuity Plan for completion, ensure service continuity, transfer resources and personnel from outsourcing organisation and transfer knowledge

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

April 3, 2011 47 Roles of Service Provider and Outsourcing Organisation During Phases of Outsourcing Relationship Initiation Delivery Completion Analysis Ongoing Service Provider Outsourcing Organisation Common Language and Expectations Agreed Roles and Responsibilities

Key Capabilities and Constituent Practices:

April 3, 2011 48 Key Capabilities and Constituent Practices Idealised set of steps for a service provider and end-user organisations and outsourcing organisation to perform when taking on a new outsourcing service Provides a detailed checklist of work to be done Each practices contains a set of activities and tasks Can be modified to suit the circumstances: scope of outsourcing, size of service, duration of contract Can forms the basis of a project plan for elements of outsourcing work such as initiation Reduces risk of failure

Key Capabilities Within Outsourcing Lifecycle for Service Providers:

April 3, 2011 49 Key Capabilities Within Outsourcing Lifecycle for Service Providers Ongoing Initiation Delivery Completion People Management Performance Management Relationship Management Technology Management Knowledge Management Threat Management Contracting Service Design and Deployment Service Delivery Service Transfer Service Transfer

Key Capabilities Within Outsourcing Lifecycle for End-User Organisations:

April 3, 2011 50 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 Completion Analysis Knowledge Management Organisational Change Management Threat Management Outsourcing Approach Service Transfer Service Provider Evaluation

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

April 3, 2011 51 Key Capabilities Within Outsourcing Lifecycle for Service Providers and End-User Organisations

Key Capabilities and Constituent Practices for Service Providers :

April 3, 2011 52 Key Capabilities and Constituent Practices for Service Providers

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

April 3, 2011 53 Key Capabilities and Constituent Practices for End-User Organisations - 1

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

April 3, 2011 54 Key Capabilities and Constituent Practices for End-User Organisations - 2

Analysis Phase:

April 3, 2011 55 Analysis Phase End-User Organisation Concerned with analysing operations and functions to identify those services, processes, or functions that could potentially be outsourced Understanding the current, or as-is, state of the client 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

Initiation Phase:

April 3, 2011 56 Initiation Phase Service Provider Concerned with preparation for and initiation of service delivery Gather requirements Perform due diligence to validate customer information Assess if and how the requirements can be met Prepare for negotiation Negotiate and sign contract Confirm assumptions Confirm responsibilities and commitments Design the service Review the service design Create service specification Deploy the service Transfer resources - personnel, technology, infrastructure, applications Transition of service End-User Organisation Concerned with preparation for and initiation of managing outsourced services Preparing for service selection by developing the solicitation and criteria for selection Soliciting and evaluating potential service providers Preparing for negotiation by having an organisational position on cost, quality and other topics that need to be negotiated Defining the formal service level agreements and service provider performance measures Understanding service 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

Delivery Phase:

April 3, 2011 57 Delivery Phase Service Provider Concerned with service delivery including management of service delivery, verification that commitments are being met and management of costs associated with the service provision Planning and tracking the service delivery activities Delivering services according to the agreed commitments Managing the finances associated with the service delivery Identifying and controlling modifications to the services being provided Identifying and controlling modifications to associated service commitments Identifying problems that impact the service delivery and taking both preventive and corrective actions End-User Organisation Concerned with monitoring the service provider’s service delivery capabilities, including the ongoing monitoring of service provider performance to verify that commitments are being met, monitoring changes, management of the finances and agreements associated with the service provision, fostering realistic expectations and performing value analysis Planning and tracking the outsourcing management activities Ensuring that services are delivered according to the agreed-upon commitments 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

Ongoing Phase:

April 3, 2011 58 Ongoing Phase Service Provider Management functions that need to be performed during the entire outsourcing lifecycle Manage and motivate personnel to effectively deliver services Manage relationships with clients, suppliers and business partners Measure and review the 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 their work 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 End-User Organisation 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 their work 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

Completion Phase:

April 3, 2011 59 Completion Phase Service Provider Concerned with closing down the engagement at the end of the outsourcing lifecycle Manage the transfer of resources to the new service provider, whether it is to the client or to another service provider Ensure service continuity during transfer Identify and transferring the knowledge critical for the delivery of service End-User Organisation 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

Benefits of Structured Approach:

April 3, 2011 60 Benefits of Structured Approach Service Provider Minimises problems Provides common language Provides common understanding of roles and responsibilities Provides mechanism for resolving issues Know what is expected and what should be done End-User Organisation Provides structured approach to evaluating and adopting outsourcing Demonstrates due diligence in selecting outsourcing partner Provides common understanding of roles and responsibilities Provides mechanism for resolving issues Knows service to be provided and measures delivery

Outsourcing for Service Providers:

April 3, 2011 61 Outsourcing for Service Providers

Phases of Outsourcing Relationship:

April 3, 2011 62 Phases of Outsourcing Relationship Ongoing Initiation Delivery Completion

Phases of Outsourcing Relationship:

April 3, 2011 63 Phases of Outsourcing Relationship 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

Initiation Phase:

April 3, 2011 64 Initiation Phase Concerned with preparation for and initiation of service delivery Gather requirements Perform due diligence to validate customer information Assess if and how the requirements can be met Prepare for negotiation Negotiate and sign contract Confirm assumptions Confirm responsibilities and commitments Design the service Review the service design Create service specification Deploy the service Transfer resources - personnel, technology, infrastructure, applications Transition of service

Delivery Phase:

April 3, 2011 65 Delivery Phase Concerned with service delivery including management of service delivery, verification that commitments are being met and management of costs associated with the service provision Planning and tracking the service delivery activities Delivering services according to the agreed commitments Managing the finances associated with the service delivery Identifying and controlling modifications to the services being provided Identifying and controlling modifications to associated service commitments Identifying problems that impact the service delivery and taking both preventive and corrective actions

Completion Phase:

April 3, 2011 66 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

Ongoing Phase:

April 3, 2011 67 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 their work 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

Key Capabilities Within Outsourcing Lifecycle:

April 3, 2011 68 Key Capabilities Within Outsourcing Lifecycle Ongoing Initiation Delivery Completion People Management Performance Management Relationship Management Technology Management Knowledge Management Threat Management Contracting Service Design and Deployment Service Delivery Service Transfer Service Transfer

Key Capabilities and Constituent Practices:

April 3, 2011 69 Key Capabilities and Constituent Practices

Key Capabilities and Constituent Practices:

April 3, 2011 70 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 practice contains a set of activities and tasks Can be modified to suit the circumstances: scope of outsourcing, size of client, duration of contract Can forms the basis of a project plan for elements of outsourcing work such as initiation Reduces risk of failure Demonstrates professionalism to potential clients

Key Issues For Successful Outsourcing:

April 3, 2011 71 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

Key Issues For Successful Outsourcing:

April 3, 2011 72 Key Issues For Successful Outsourcing Establishing and maintaining trust with stakeholders Managing stakeholder expectations Translating implicit and explicit needs into defined requirements with agreed-upon levels of quality Establishing well-defined contracts with stakeholders, including clients, suppliers and partners Reviewing service design and deployment to ensure adequate coverage of the requirements Ensuring the effectiveness of interactions with stakeholders Managing supplier and partner relationships to ensure that commitments are met Ensuring compliance with statutory and regulatory requirements Managing clients’ security Managing cultural differences between stakeholders Monitoring and controlling activities to consistently meet the service delivery commitments

Key Issues For Successful Outsourcing:

April 3, 2011 73 Key Issues For Successful Outsourcing Monitoring and managing clients’ and end-users’ satisfaction Building and maintaining the competencies that enable personnel to effectively perform their roles and responsibilities Managing employee satisfaction, motivation and retention Establishing and maintaining an effective work environment Maintaining a competitive advantage Innovating, building flexibility and increasing responsiveness to meet unique and evolving client requirements Managing rapid technological shifts and maintaining the availability, reliability, accessibility and security of technology Capturing and using knowledge Smoothly transferring services and resources Maintaining continuity of the service delivery Capturing and transferring knowledge gained to the client during contract completion Measuring and analysing the reasons for termination, to prevent reoccurrence

Issue 1 - Establishing And Maintaining Trust With Stakeholders :

April 3, 2011 74 Issue 1 - Establishing And Maintaining Trust With Stakeholders Building a trusting relationship with stakeholders is critical to success Important for all suppliers and partners involved in the outsourcing relationship – hardware, software, communications, services By effectively managing expectations and responding to personnel, clients and end-users, service provider establishes trust with its stake- holders to help establish long-term relationships

Issue 2 - Managing Stakeholder Expectations :

April 3, 2011 75 Issue 2 - Managing Stakeholder Expectations Differences in expectations between the client, the service provider and the suppliers and partners is a common source of failure Identifying and managing those expectations helps to ensure a common understanding of what is necessary for success

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

April 3, 2011 76 Issue 3 - Translating Implicit And Explicit Needs Into Defined Requirements With Agreed-Upon Levels Of Quality Frequent cause of failure in outsourcing is that the service provider does not fully understand the needs of the client Inability of clients to adequately express their needs Lack of rigor by the service provider in gathering and analysing those 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

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

April 3, 2011 77 Issue 4 - Establishing Well-Defined Contracts With Stakeholders, Including Clients, Suppliers And Partners Poorly written contracts are a common cause of failure and result in a large number of contracts being renegotiated Outsourcing arrangements are typically long-term in nature and require contracts that are clear and detailed as well as being flexible enough to account for business changes Formal mechanisms are required in order for the provider to identify changing needs, modify services based on those changes and amend contracts to reflect the current requirements and commitments

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

April 3, 2011 78 Issue 5 - Reviewing Service Design And Deployment To Ensure Adequate Coverage Of The Requirements Failure in outsourcing can be caused by the service provider not fully addressing the needs of the client To ensure that the service delivery will meet the 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

Issue 6 - Ensuring The Effectiveness Of Interactions With Stakeholders :

April 3, 2011 79 Issue 6 - Ensuring The Effectiveness Of Interactions With Stakeholders Large-scale outsourcing often involves a combination of face-to-face and remote interactions Interactions with clients need to be managed in order to effectively understand their needs Clear communications with all stakeholders can have a strong positive impact on the ability to effectively perform work

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

April 3, 2011 80 Issue 7 - Managing Supplier And Partner Relationships To Ensure That Commitments Are Met Outsourcing engagements can include multiple service providers working together to meet the 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

Issue 8 - Ensuring Compliance With Statutory And Regulatory Requirements :

April 3, 2011 81 Issue 8 - Ensuring Compliance With Statutory And Regulatory Requirements Service providers are often faced with the need to comply with a large variety of laws and regulations Effectively operating in this environment requires rigorous analysis and management of all applicable legal requirements to protect themselves and their clients

Issue 9 - Managing Clients’ Security :

April 3, 2011 82 Issue 9 - Managing Clients’ Security Managing security and controlling critical data and assets are critical to establishing trust Security management includes protection of intellectual property, confidentiality and privacy concerns Breakdowns, such as security breaches, can impact the service provider’s ability to provide adequate service and can irreparably damage the relationship with the client

Issue 10 - Managing Cultural Differences Between Stakeholders :

April 3, 2011 83 Issue 10 - Managing Cultural Differences Between Stakeholders In large-scale outsourcing there are many potential cultural differences between service providers, clients, end-users, suppliers and partners These include differences between country, region and organisational culture These differences need to be identified and addressed in order to guard against breakdowns in communication

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

April 3, 2011 84 Issue 11 - Monitoring And Controlling Activities To Consistently Meet The Service Delivery Commitments Successful service providers monitor their service delivery activities to ensure that the 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

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

April 3, 2011 85 Issue 12 - Monitoring And Managing Clients’ And End-Users’ Satisfaction Success is not always defined in terms of meeting the agreed-upon commitments because clients and end-users may be unsatisfied even when commitments are being met Successful outsourcing engagements monitor the satisfaction levels of the stakeholders to identify problems and take action

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

April 3, 2011 86 Issue 13 - Building And Maintaining The Competencies That Enable Personnel To Effectively Perform Their Roles And Responsibilities Outsourcing is often highly dependant on specialised competencies without which personnel cannot effectively perform the work assigned to them Service providers need to manage the competencies of individuals as well as the workforce as a whole in order to ensure that work is effectively performed and that the client’s requirements are met.

Issue 14 - Managing Employee Satisfaction, Motivation And Retention :

April 3, 2011 87 Issue 14 - Managing Employee Satisfaction, Motivation And Retention IT-enabled outsourcing often involves challenges during transition and deployment and service delivery High employee turnover jeopardises the service 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

Issue 15 - Establishing And Maintaining An Effective Work Environment :

April 3, 2011 88 Issue 15 - Establishing And Maintaining An Effective Work Environment A work environment that is well suited to the service being delivered enables personnel to effectively perform their work Also contributes to employee satisfaction and retention

Issue 16 - Maintaining A Competitive Advantage :

April 3, 2011 89 Issue 16 - Maintaining A Competitive Advantage Service providers need to effectively demonstrate their capabilities relative to competitors Initially done to differentiate the service provider from the competition in such a way that they will be chosen over other providers Done to continually improve the 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

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

April 3, 2011 90 Issue 17 - Innovating, Building Flexibility and Increasing Responsiveness To Meet Unique And Evolving Client Requirements Successful outsourcing engagements are those where the service provider is able to be flexible and responsive to clients’ changing needs Adopting innovations is one way to add value and meet new needs Actively manage the performance of the organisation and continuously improve its capabilities

Issue 18 - Managing Rapid Technological Shifts And Maintaining The Availability, Reliability, Accessibility And Security Of Technology :

April 3, 2011 91 Issue 18 - Managing Rapid Technological Shifts And Maintaining The Availability, Reliability, Accessibility And Security Of Technology Technology is a key component of IT outsourcing such as public cloud Challenges for the service provider include keeping pace with rapid changes in technology and effectively managing the technology infrastructure while changes are incorporated

Issue 19 - Capturing And Using Knowledge :

April 3, 2011 92 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

Issue 20 - Smoothly Transferring Services And Resources :

April 3, 2011 93 Issue 20 - Smoothly Transferring Services And Resources A common cause of failure in outsourcing is the ineffective management of the transfer of services and resources to and from the service provider leading to service delivery problems Successful service providers rigorously control the transfer of services and resources to ensure that the new service provider is able to adequately deliver the service and that service continuity is maintained

Issue 21 - Maintaining Continuity Of The Service Delivery :

April 3, 2011 94 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

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

April 3, 2011 95 Issue 22 - Capturing And Transferring Knowledge Gained To The Client During Contract Completion Frequent concern of clients who consider outsourcing is that in-house knowledge will be eroded, making it impossible to bring outsourced services back in-house Successful service providers address this concern by making provisions for capturing and transferring knowledge back to the client during contract completion

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

April 3, 2011 96 Issue 23 - Measuring And Analysing The Reasons for T ermination 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

Key Capabilities and Constituent Practices:

April 3, 2011 97 Key Capabilities and Constituent Practices

1 Service Transfer - Activities:

April 3, 2011 98 1 Service Transfer - Activities

1 Service Transfer - 1.1 Resources Transferred In:

April 3, 2011 99 1 Service Transfer - 1.1 Resources Transferred In Scope Establish and implement procedures to verify and account for resources transferred to the organisation Track and manage resource transfers in order to facilitate a smooth transfer of responsibilities prior to service delivery Activities Provide support for creating and maintaining the procedures for verifying and accounting for resources transferred to the organisation Document and implement the procedures for verifying and accounting for resources transferred to the organisation Support the implementation of the procedures for verifying and accounting for resources transferred to the organisation

1 Service Transfer - 1.2 Personnel Transferred In:

April 3, 2011 100 1 Service Transfer - 1.2 Personnel Transferred In Scope Establish and implement procedures to manage the transfer of personnel to the organisation Transfer the necessary personnel and ensure that the necessary personnel competencies are in place in order to enable the organisation to effectively deliver service Activities Provide support for creating and maintaining the procedures for managing the transfer of personnel to the organisation Document and implement the procedures for managing the transfer of personnel to the organisation Support the implementation of the procedures for managing the transfer of personnel to the organisation

1 Service Transfer - 1.3 Service Continuity:

April 3, 2011 101 1 Service Transfer - 1.3 Service Continuity Scope Establish and implement procedures to ensure the continuity of service Maintain service continuity as service is transferred to the client, or to another service provide, in order to improve client satisfaction Activities Provide support for creating and maintaining the procedures for ensuring continuity of service across the organisation Document and implement the procedures for ensuring continuity of service Support the implementation of the procedures for ensuring continuity of service across the organisation

1 Service Transfer - 1.4 Resources Transferred Out:

April 3, 2011 102 1 Service Transfer - 1.4 Resources Transferred Out Scope Establish and implement procedures to transfer resources from the organisation Manage the transfer of resources in order to help ensure a smooth hand-over and improve the 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

1 Service Transfer - 1.5 Personnel Transferred Out:

April 3, 2011 103 1 Service Transfer - 1.5 Personnel Transferred Out Scope Establish and implement procedures to manage the transfer of personnel from the organisation Activities Provide support for creating and maintaining the procedures for managing the transfer of personnel from the organisation Document and implement the procedures for managing the transfer of personnel from the organisation Support the implementation of the procedures for managing the transfer of personnel from the organisation

1 Service Transfer - 1.6 Knowledge Transferred Out:

April 3, 2011 104 1 Service Transfer - 1.6 Knowledge Transferred Out Scope Establish and implement procedures to transfer to the client the knowledge 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

2 Contracting - Activities:

April 3, 2011 105 2 Contracting - Activities

2 Contracting - 2.1 Negotiations:

April 3, 2011 106 2 Contracting - 2.1 Negotiations Scope Establish and implement guidelines for negotiations with current or 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

2 Contracting - 2.2 Pricing:

April 3, 2011 107 2 Contracting - 2.2 Pricing Scope Establish and implement guidelines for pricing services Activities Provide support for creating and maintaining the guidelines for pricing services Document and implement the guidelines for pricing services Support the implementation of guidelines for pricing services

2 Contracting - 2.3 Confirm Existing Conditions:

April 3, 2011 108 2 Contracting - 2.3 Confirm Existing Conditions Scope Establish and implement guidelines for confirming existing conditions about potential engagements Activities Provide support for creating and maintaining the guidelines for confirming existing conditions Document and implement the guidelines for confirming existing conditions Support the implementation of guidelines for confirming existing conditions

2 Contracting - 2.4 Market Information:

April 3, 2011 109 2 Contracting - 2.4 Market Information Scope Analyse and use market information about prospective clients Activities Provide support for creating and maintaining the work products and tasks for analysing and using market information about prospective clients Document and implement the work products and tasks required for analysing and using market information about prospective clients Support the implementation of analysing and using market information about prospective clients

2 Contracting - 2.5 Plan Negotiations:

April 3, 2011 110 2 Contracting - 2.5 Plan Negotiations Scope Plan and track negotiations with current or prospective clients Activities Provide support for creating and maintaining the work products and tasks for planning and tracking client negotiations Document and implement the work products and tasks required for planning and tracking client negotiations Support the implementation of planning and tracking client negotiations

2 Contracting - 2.6 Gather Requirements:

April 3, 2011 111 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

2 Contracting - 2.7 Review Requirements:

April 3, 2011 112 2 Contracting - 2.7 Review Requirements Scope Prior to committing to the prospective client, review requirements and verify that the organisation can meet them Activities Provide support for creating and maintaining the work products and tasks for reviewing requirements and verifying that the organisation can meet them Document and implement the work products and tasks required for reviewing requirements and verifying that the organisation can meet them Support the implementation of reviewing requirements and verifying that the organisation can meet them

2 Contracting - 2.8 Respond to Requirements:

April 3, 2011 113 2 Contracting - 2.8 Respond to Requirements Scope Establish and implement procedures to respond to the requirements of a prospective client Activities Provide support for creating and maintaining the procedures for responding to requirements Document and implement the procedures for responding to requirements Support the implementation of the procedures for responding to requirements

2 Contracting - 2.9 Contract Roles:

April 3, 2011 114 2 Contracting - 2.9 Contract Roles Scope Establish and implement procedures to respond to the requirements of a prospective client Activities Provide support for creating and maintaining the procedures for responding to requirements Document and implement the procedures for responding to requirements Support the implementation of the procedures for responding to requirements

2 Contracting - 2.10 Create Contracts:

April 3, 2011 115 2 Contracting - 2.10 Create Contracts Scope Define the roles and responsibilities of the organisation and the client with respect to the proposed contract Consistent and effective legal agreements in order to enable all the parties to have a clear understanding of what services will be delivered and at what level of quality Given the long-term nature of most outsourcing engagements, implementing procedures for contracts and flexibility in the relationship between the client and the organisation are critical to success Activities Provide support for creating and maintaining the work products and tasks for defining the roles and responsibilities of the organisation and client Document and implement the work products and tasks required for defining the roles and responsibilities of the organisation and client Support the implementation of defining the roles and responsibilities of the organisation and client

2 Contracting - 2.11 Amend Contracts:

April 3, 2011 116 2 Contracting - 2.11 Amend Contracts Scope Establish and implement procedures to amend contracts Activities Provide support for creating and maintaining the procedures for amending contracts Document and implement the procedures for amending contracts Support the implementation of the procedures for amending contracts

3 Service Design and Deployment - Activities:

April 3, 2011 117 3 Service Design and Deployment - Activities

3 Service Design and Deployment - 3.1 Communicate Requirements:

April 3, 2011 118 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

3 Service Design and Deployment - 3.2 Design and Deploy Service:

April 3, 2011 119 3 Service Design and Deployment - 3.2 Design and Deploy Service Scope Establish and implement procedures to design and deploy the service to meet client requirements Activities Provide support for creating and maintaining the procedures for designing and deploying the service across the organisation Document and implement the procedures for designing and deploying the service Support the implementation of the procedures for designing and deploying the service across the organisation

3 Service Design and Deployment - 3.3 Plan Design and Deployment:

April 3, 2011 120 3 Service Design and Deployment - 3.3 Plan Design and Deployment Scope Plan and track the design and deployment of the service Activities Provide support for creating and maintaining the work products and tasks for planning and tracking the design and deployment of the 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

3 Service Design and Deployment - 3.4 Service Specification:

April 3, 2011 121 3 Service Design and Deployment - 3.4 Service Specification Scope Create the service specification Create a service specification that clearly, accurately and comprehensively describes the services to be provided in order to effectively meet the 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

3 Service Design and Deployment - 3.5 Service Design:

April 3, 2011 122 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

3 Service Design and Deployment - 3.6 Design Feedback:

April 3, 2011 123 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

3 Service Design and Deployment - 3.7 Verify Design:

April 3, 2011 124 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

3 Service Design and Deployment - 3.8 Deploy Service:

April 3, 2011 125 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

4 Service Delivery - Activities:

April 3, 2011 126 4 Service Delivery - Activities

4 Service Delivery - 4.1 Plan Service Delivery:

April 3, 2011 127 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

4 Service Delivery - 4.2 Train Clients:

April 3, 2011 128 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

4 Service Delivery - 4.3 Deliver Service:

April 3, 2011 129 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

4 Service Delivery - 4.4 Verify Service Commitments:

April 3, 2011 130 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

4 Service Delivery - 4.5 Correct Problems:

April 3, 2011 131 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

4 Service Delivery - 4.6 Prevent Known Problems:

April 3, 2011 132 4 Service Delivery - 4.6 Prevent Known Problems Scope Establish and implement procedures to take preventive action for known 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

4 Service Delivery - 4.7 Service Modifications:

April 3, 2011 133 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

4 Service Delivery - 4.8 Financial Management:

April 3, 2011 134 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

5 Knowledge Management - Activities:

April 3, 2011 135 5 Knowledge Management - Activities

5 Knowledge Management - 5.1 Share Knowledge:

April 3, 2011 136 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

5 Knowledge Management - 5.2 Provide Required Information:

April 3, 2011 137 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 personnel need to perform their work Support the implementation of identifying, controlling and making available the information personnel need to perform their work

5 Knowledge Management - 5.3 Knowledge System:

April 3, 2011 138 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

5 Knowledge Management - 5.4 Process Assets:

April 3, 2011 139 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 set of process assets for use across the organisation

5 Knowledge Management - 5.5 Engagement Knowledge:

April 3, 2011 140 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

5 Knowledge Management - 5.6 Reuse:

April 3, 2011 141 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

5 Knowledge Management - 5.7 Version and Change Control:

April 3, 2011 142 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 control and change control

5 Knowledge Management - 5.8 Resource Consumption:

April 3, 2011 143 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

6 People Management - Activities:

April 3, 2011 144 6 People Management - Activities

6 People Management - 6.1 Encourage Innovation:

April 3, 2011 145 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

6 People Management - 6.2 Participation in Decisions:

April 3, 2011 146 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 across the organisation

6 People Management - 6.3 Work Environment:

April 3, 2011 147 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

6 People Management - 6.4 Assign Responsibilities:

April 3, 2011 148 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

6 People Management - 6.5 Define Roles:

April 3, 2011 149 6 People Management - 6.5 Define Roles Scope Define and communicate the roles, responsibilities and authority of 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

6 People Management - 6.6 Workforce Competencies:

April 3, 2011 150 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

6 People Management - 6.7 Plan and Deliver Training:

April 3, 2011 151 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

6 People Management - 6.8 Plan and Deliver Training:

April 3, 2011 152 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

6 People Management - 6.9 Performance Feedback:

April 3, 2011 153 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

6 People Management - 6.10 Performance Feedback:

April 3, 2011 154 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

6 People Management - 6.11 Rewards:

April 3, 2011 155 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

7 Performance Management - Activities:

April 3, 2011 156 7 Performance Management - Activities

7 Performance Management - 7.1 Engagement Objectives:

April 3, 2011 157 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

7 Performance Management - 7.2 Verify Processes:

April 3, 2011 158 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

7 Performance Management - 7.3 Adequate Resources:

April 3, 2011 159 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

7 Performance Management - 7.4 Organisational Objectives:

April 3, 2011 160 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

7 Performance Management - 7.5 Review Organisational Performance:

April 3, 2011 161 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

7 Performance Management - 7.6 Make Improvements:

April 3, 2011 162 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

7 Performance Management - 7.7 Achieve Organisational Objectives:

April 3, 2011 163 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

7 Performance Management - 7.8 Capability Baselines:

April 3, 2011 164 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

7 Performance Management - 7.9 Benchmark:

April 3, 2011 165 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

7 Performance Management - 7.10 Prevent Potential Problems:

April 3, 2011 166 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 potential problems Support the implementation of programs to take preventive action on potential problems

7 Performance Management - 7.11 Deploy Innovations:

April 3, 2011 167 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

8 Relationship Management - Activities:

April 3, 2011 168 8 Relationship Management - Activities

8 Relationship Management - 8.1 Client Interactions:

April 3, 2011 169 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

8 Relationship Management - 8.2 Select Suppliers and Partners:

April 3, 2011 170 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

8 Relationship Management - 8.3 Manage Suppliers and Partners:

April 3, 2011 171 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

8 Relationship Management - 8.4 Cultural Fit:

April 3, 2011 172 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

8 Relationship Management - 8.5 Stakeholder Information:

April 3, 2011 173 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

8 Relationship Management - 8.6 Client Relationships:

April 3, 2011 174 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

8 Relationship Management - 8.7 Supplier and Partner Relationships:

April 3, 2011 175 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

8 Relationship Management - 8.8 Value Creation:

April 3, 2011 176 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

9 Technology Management - Activities:

April 3, 2011 177 9 Technology Management - Activities

9 Technology Management - 9.1 Acquire Technology:

April 3, 2011 178 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

9 Technology Management - 9.2 Technology Licenses:

April 3, 2011 179 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

9 Technology Management - 9.3 Control Technology:

April 3, 2011 180 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

9 Technology Management - 9.4 Technology Integration:

April 3, 2011 181 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

9 Technology Management - 9.5 Optimise Technology:

April 3, 2011 182 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

9 Technology Management - 9.6 Proactively Introduce Technology:

April 3, 2011 183 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

10 Threat Management - Activities:

April 3, 2011 184 10 Threat Management - Activities

10 Threat Management - 10.1 Risk Management:

April 3, 2011 185 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

10 Threat Management - 10.2 Engagement Risk:

April 3, 2011 186 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

10 Threat Management - 10.3 Risk Across Engagements:

April 3, 2011 187 10 Threat Management - 10.3 Risk Across Engagements Scope Establish and implement procedures to manage risks across client engagements 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

10 Threat Management - 10.4 Security:

April 3, 2011 188 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

10 Threat Management - 10.5 Intellectual Property:

April 3, 2011 189 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

10 Threat Management - 10.6 Statutory and Regulatory Compliance:

April 3, 2011 190 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

10 Threat Management - 10.7 Disaster Recovery:

April 3, 2011 191 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

Outsourcing for End-User Organisations:

April 3, 2011 192 Outsourcing for End-User Organisations

Outsourcing Challenges:

April 3, 2011 193 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

Reasons for Adopting a Structured Approach to Outsourcing:

April 3, 2011 194 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 e ffective business controls Enables c ontinual 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

Key Issues For Successful Outsourcing:

April 3, 2011 195 Key Issues For Successful Outsourcing 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

Outsourcing Organisation Issue 1 - Establishing a Strategy For the Organisation’s Outsourcing Activities:

April 3, 2011 196 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 O utsourcing 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

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

April 3, 2011 197 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

Outsourcing Organisation Issue 3 - Actively Managing Outsourcing Risks:

April 3, 2011 198 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

Phases of Outsourcing Relationship for End-User Organisations:

April 3, 2011 199 Phases of Outsourcing Relationship for End-User Organisations Ongoing Initiation Delivery Completion Analysis

Phases of Outsourcing Relationship:

April 3, 2011 200 Phases of Outsourcing Relationship 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

Analysis Phase:

April 3, 2011 201 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

Initiation Phase:

April 3, 2011 202 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

Delivery Phase:

April 3, 2011 203 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, monitoring changes, management of the finances and agreements associated with the service provision, fostering realistic expectations and performing value analysis Planning and tracking the outsourcing management activities Ensuring that services are delivered according to the agreed-upon commitments 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

Completion Phase:

April 3, 2011 204 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

Ongoing Phase:

April 3, 2011 205 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 their work 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

Key Capabilities Within Outsourcing Lifecycle for End-User Organisations:

April 3, 2011 206 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 Completion Analysis Knowledge Management Organisational Change Management Threat Management Outsourcing Approach Service Transfer Service Provider Evaluation

Key Capabilities and Constituent Practices of Outsourcing Process - 1:

April 3, 2011 207 Key Capabilities and Constituent Practices of Outsourcing Process - 1

Key Capabilities and Constituent Practices of Outsourcing Process - 2:

April 3, 2011 208 Key Capabilities and Constituent Practices of Outsourcing Process - 2

Key Capabilities and Constituent Practices:

April 3, 2011 209 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

Analysis Phase - Outsourcing Opportunity Analysis:

April 3, 2011 210 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

Analysis Phase - Outsourcing Approach:

April 3, 2011 211 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 of the 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

Initiation Phase - Outsourcing Planning:

April 3, 2011 212 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

Initiation Phase - Service Provider Evaluation:

April 3, 2011 213 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

Initiation Phase - Outsourcing Agreements:

April 3, 2011 214 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

Initiation Phase - Service Transfer :

April 3, 2011 215 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

Delivery Phase - Sourced Services Management:

April 3, 2011 216 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

Completion Phase - Outsourcing Completion:

April 3, 2011 217 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

Ongoing Phase - Outsourcing Strategy Management:

April 3, 2011 218 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

Ongoing Phase - Governance Management:

April 3, 2011 219 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, as well 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

Ongoing Phase - Relationship Management:

April 3, 2011 220 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

Ongoing Phase - Value Management:

April 3, 2011 221 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 by benchmarking the performance of the organisation, competitive analysis of its outsourcing performance as compared to that of other client organisations and organizing 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

Ongoing Phase - Organisational Change Management:

April 3, 2011 222 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

Ongoing Phase - People Management:

April 3, 2011 223 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

Ongoing Phase - Knowledge Management:

April 3, 2011 224 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

Ongoing Phase - Technology Management:

April 3, 2011 225 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

Ongoing Phase - Threat Management:

April 3, 2011 226 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

1 Outsourcing Opportunity Analysis - Activities:

April 3, 2011 227 1 Outsourcing Opportunity Analysis - Activities

1 Outsourcing Opportunity Analysis - 1.1 Define Current State:

April 3, 2011 228 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

1 Outsourcing Opportunity Analysis - 1.2 Outsourcing Criteria:

April 3, 2011 229 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

1 Outsourcing Opportunity Analysis - 1.3 Demand Identification:

April 3, 2011 230 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

1 Outsourcing Opportunity Analysis - 1.4 Outsourcing Options:

April 3, 2011 231 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 organizing outsourcing options for potential outsourcing opportunities Document and implement the work products and tasks required for organizing outsourcing options for potential outsourcing opportunities Support the implementation of organizing outsourcing options for potential outsourcing opportunities

2 Outsourcing Approach - Activities:

April 3, 2011 232 2 Outsourcing Approach - Activities

2 Outsourcing Approach - 2.1 Outsourcing Approach:

April 3, 2011 233 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 Activities Provide support for creating and maintaining the work products and tasks for 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

2 Outsourcing Approach - 2.2 Business Case:

April 3, 2011 234 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

2 Outsourcing Approach - 2.3 Governance Model:

April 3, 2011 235 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 Activities Provide support for creating and maintaining the work products and tasks for 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

2 Outsourcing Approach - 2.4 Impact and Risk Analysis:

April 3, 2011 236 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

2 Outsourcing Approach - 2.5 Outsourcing Initiation Decision:

April 3, 2011 237 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 Activities Provide support for creating and maintaining the work products and tasks for 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

3 Outsourcing Planning - Activities:

April 3, 2011 238 3 Outsourcing Planning - Activities

3 Outsourcing Planning - 3.1 Establish Outsourcing Project:

April 3, 2011 239 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

3 Outsourcing Planning - 3.2 Service Definition:

April 3, 2011 240 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

3 Outsourcing Planning - 3.3 Service Provider Selection Procedures:

April 3, 2011 241 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

3 Outsourcing Planning - 3.4 Evaluation Criteria:

April 3, 2011 242 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 Activities Provide support for creating and maintaining the work products and tasks for 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

3 Outsourcing Planning - 3.5 Prepare Service Requirements:

April 3, 2011 243 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 Activities Provide support for creating and maintaining the work products and tasks for 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

4 Service Provider Evaluation - Activities:

April 3, 2011 244 4 Service Provider Evaluation - Activities

4 Service Provider Evaluation - 4.1 Communicate Requirements:

April 3, 2011 245 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 Activities Provide support for creating and maintaining the work products and tasks for 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

4 Service Provider Evaluation - 4.2 Evaluate Potential Service Providers:

April 3, 2011 246 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

4 Service Provider Evaluation - 4.3 Select Candidate Service Providers:

April 3, 2011 247 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 Activities Provide support for creating and maintaining the work products and tasks for 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

5 Outsourcing Agreements - Activities:

April 3, 2011 248 5 Outsourcing Agreements - Activities

5 Outsourcing Agreements - 5.1 Negotiations Guidelines:

April 3, 2011 249 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

5 Outsourcing Agreements - 5.2 Confirm Existing Conditions:

April 3, 2011 250 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

5 Outsourcing Agreements - 5.3 Negotiations:

April 3, 2011 251 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

5 Outsourcing Agreements - 5.4 Agreement Roles:

April 3, 2011 252 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

5 Outsourcing Agreements - 5.5 Define SLAs and Measures:

April 3, 2011 253 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 Activities Provide support for creating and maintaining the work products and tasks for 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

5 Outsourcing Agreements - 5.6 Create Agreements:

April 3, 2011 254 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

5 Outsourcing Agreements - 5.7 Amend Agreements:

April 3, 2011 255 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

6 Service Transfer - Activities:

April 3, 2011 256 6 Service Transfer - Activities

6 Service Transfer - 6.1 Service Transition:

April 3, 2011 257 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 and for 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

6 Service Transfer - 6.2 Verify Design:

April 3, 2011 258 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

6 Service Transfer - 6.3 Resources Transferred Out:

April 3, 2011 259 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 and accounting for resources transferred to service providers Support the implementation of verifying and accounting for resources transferred to service providers

6 Service Transfer - 6.4 Personnel Transferred Out:

April 3, 2011 260 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

6 Service Transfer - 6.5 Knowledge Transferred Out:

April 3, 2011 261 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 Activities Provide support for creating and maintaining the work products and tasks for 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

7 Sourced Services Management - Activities:

April 3, 2011 262 7 Sourced Services Management - Activities

7 Sourced Services Management - 7.1 Perform Outsourcing Management:

April 3, 2011 263 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

7 Sourced Services Management - 7.2 Performance Monitoring:

April 3, 2011 264 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

7 Sourced Services Management - 7.3 Financial Management:

April 3, 2011 265 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 financial management of the outsourced services Support the implementation of financial management of the outsourced service

7 Sourced Services Management - 7.4 Agreement Management:

April 3, 2011 266 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 Activities Provide support for creating and maintaining the procedures for 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

7 Sourced Services Management - 7.5 Problem and Incident Monitoring:

April 3, 2011 267 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

7 Sourced Services Management - 7.6 Service Delivery Change Management:

April 3, 2011 268 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

7 Sourced Services Management - 7.7 Service Change Management:

April 3, 2011 269 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

7 Sourced Services Management - 7.8 Review Service Performance:

April 3, 2011 270 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

7 Sourced Services Management - 7.9 Stakeholder Feedback:

April 3, 2011 271 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 organizing stakeholder inputs and feedback Document and implement the guidelines required for collecting and organizing stakeholder inputs and feedback Support the implementation of collecting and organizing stakeholder inputs and feedback

7 Sourced Services Management - 7.10 Service Value Analysis:

April 3, 2011 272 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 their expected outcomes must be well defined and documented State value propositions as outcomes or goals that are quantifiable and measurable Activities Provide support for creating and maintaining the procedures for 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

7 Sourced Services Management - 7.11 Continuation Decision:

April 3, 2011 273 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

8 Outsourcing Completion - Activities:

April 3, 2011 274 8 Outsourcing Completion - Activities

8 Outsourcing Completion - 8.1 Completion Planning:

April 3, 2011 275 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 Activities Provide support for creating and maintaining the work products and tasks for 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

8 Outsourcing Completion - 8.2 Service Continuity:

April 3, 2011 276 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 ensure that 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 service during completion

8 Outsourcing Completion - 8.3 Resources Transfer from Service Provider:

April 3, 2011 277 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

8 Outsourcing Completion - 8.4 Personnel Transfer from Service Provider:

April 3, 2011 278 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 is managed according to documented procedures Support the implementation of transfer of personnel during completion

8 Outsourcing Completion - 8.5 Knowledge Transfer from Service Provider:

April 3, 2011 279 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 Activities Provide support for creating and maintaining the work products and tasks for ensuring that knowledge transfer during completion is 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

9 Outsourcing Strategy Management - Activities:

April 3, 2011 280 9 Outsourcing Strategy Management - Activities

9 Outsourcing Strategy Management - 9.1 Outsourcing Sponsorship:

April 3, 2011 281 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

9 Outsourcing Strategy Management - 9.2 Outsourcing Constraints:

April 3, 2011 282 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 Activities Provide support for creating and maintaining the work products and tasks for determining the constraints that impact the client organisation’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

9 Outsourcing Strategy Management - 9.3 Potential Outsourcing Areas:

April 3, 2011 283 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

9 Outsourcing Strategy Management - 9.4 Outsourcing Objectives:

April 3, 2011 284 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 Activities Provide support for creating and maintaining the work products and tasks for 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

9 Outsourcing Strategy Management - 9.5 Organisational Outsourcing Strategy:

April 3, 2011 285 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

10 Governance Management - Activities:

April 3, 2011 286 10 Governance Management - Activities

10 Governance Management - 10.1 Outsourcing Policy:

April 3, 2011 287 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

10 Governance Management - 10.2 Service Provider Management:

April 3, 2011 288 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 Activities Provide support for creating and maintaining the procedures for managing service providers Document and implement the procedures required for managing service providers Support the implementation of managing service providers

10 Governance Management - 10.3 Internal Stakeholder Management:

April 3, 2011 289 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

10 Governance Management - 10.4 Defined Outsourcing Processes:

April 3, 2011 290 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, organizing, acquiring, implementing, delivering, supporting and monitoring outsourcing performance, to ensure that the client’s outsourcing activities support its business objectives Activities Provide support for creating and maintaining the work products and tasks for 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

10 Governance Management - 10.5 Align Strategy and Architectures:

April 3, 2011 291 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 Activities Provide support for creating and maintaining the work products and tasks for 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

10 Governance Management - 10.6 Business Process Integration:

April 3, 2011 292 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

10 Governance Management - 10.7 Adapt to Business Change:

April 3, 2011 293 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

11 Relationship Management - Activities:

April 3, 2011 294 11 Relationship Management - Activities

11 Relationship Management - 11.1 Service Provider Interactions:

April 3, 2011 295 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 Activities Provide support for creating and maintaining the procedures for 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

11 Relationship Management - 11.2 Service Provider Relationships:

April 3, 2011 296 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

11 Relationship Management - 11.3 Internal Relationships:

April 3, 2011 297 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

11 Relationship Management - 11.4 Issue Management:

April 3, 2011 298 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

11 Relationship Management - 11.5 Cultural Fit:

April 3, 2011 299 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

11 Relationship Management - 11.6 Collaborative Relationships:

April 3, 2011 300 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

11 Relationship Management - 11.7 Innovative Relationships:

April 3, 2011 301 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

12 Value Management - Activities:

April 3, 2011 302 12 Value Management - Activities

12 Value Management - 12.1 Organisational Outsourcing Performance:

April 3, 2011 303 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

12 Value Management - 12.2 Capability Baselines:

April 3, 2011 304 12 Value Management - 12.2 Capability Baselines Scope Define capability baselines for the client organisation by organizing 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

12 Value Management - 12.3 Benchmark Outsourcing Processes:

April 3, 2011 305 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 Activities Provide support for creating and maintaining the work products and tasks for 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

12 Value Management - 12.4 Improve Outsourcing Processes:

April 3, 2011 306 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

12 Value Management - 12.5 Innovation:

April 3, 2011 307 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 Activities Provide support for creating and maintaining the work products and tasks for 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

12 Value Management - 12.6 Business Value and Impact:

April 3, 2011 308 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 Activities Provide support for creating and maintaining the work products and tasks for organizing the business value and impact of organisational outsourcing performance Document and implement the work products and tasks required for organizing the business value and impact of organisational outsourcing performance Support the implementation of organizing the business value and impact of organisational outsourcing performance

12 Value Management - 12.7 Outsourcing Alignment:

April 3, 2011 309 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 Activities Provide support for creating and maintaining the work products and tasks for 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

13 Organisational Change Management - Activities:

April 3, 2011 310 13 Organisational Change Management - Activities

13 Organisational Change Management - 13.1 Prepare for Organisational Change:

April 3, 2011 311 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 Activities Provide support for creating and maintaining the work products and tasks for preparing for organisational change needed to support the client organisation’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

13 Organisational Change Management - 13.2 Stakeholder Involvement:

April 3, 2011 312 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 in outsourcing activities Document and implement the work products and tasks required for identifying and involving relevant stakeholders in outsourcing activities

13 Organisational Change Management - 13.3 Define Future State:

April 3, 2011 313 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 organisational structure and process model

13 Organisational Change Management - 13.4 Human Resource Changes:

April 3, 2011 314 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 Activities Provide support for creating and maintaining the work products and tasks for 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

13 Organisational Change Management - 13.5 Communicate Organisational Changes:

April 3, 2011 315 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 Activities Provide support for creating and maintaining the work products and tasks for 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

13 Organisational Change Management - 13.6 Organisational Change:

April 3, 2011 316 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

14 People Management - Activities:

April 3, 2011 317 14 People Management - Activities

14 People Management - 14.1 Assign Outsourcing Responsibilities:

April 3, 2011 318 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

14 People Management - 14.2 Personnel Competencies:

April 3, 2011 319 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 Activities Provide support for creating and maintaining the work products and tasks for 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

14 People Management - 14.3 Organisational Outsourcing Competency:

April 3, 2011 320 14 People Management - 14.3 Organisational Outsourcing Competency Scope Define and manage a workforce competency focused on outsourcing across the organisation Organization must develop a workforce competency in organizing, 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 Activities Provide support for creating and maintaining the work products and tasks for 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

14 People Management - 14.4 Define Roles:

April 3, 2011 321 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 Activities Provide support for creating and maintaining the work products and tasks for 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

15 Knowledge Management - Activities:

April 3, 2011 322 15 Knowledge Management - Activities

15 Knowledge Management - 15.1 Provide Required Information:

April 3, 2011 323 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 Activities Provide support for creating and maintaining the work products and tasks for 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

15 Knowledge Management - 15.2 Knowledge System:

April 3, 2011 324 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 and communicating 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

15 Knowledge Management - 15.3 Market Information:

April 3, 2011 325 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 organizing and using information about the service provider market Document and implement the work products and tasks required for organizing and using information about the service provider market Support the implementation of organizing and using information about the service provider market

15 Knowledge Management - 15.4 Lessons Learned:

April 3, 2011 326 15 Knowledge Management - 15.4 Lessons Learned Scope Organise and use knowledge gained from outsourcing activities Effectively organizing 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 organizing and using knowledge gained from outsourcing activities Document and implement the work products and tasks required for organizing and using knowledge gained from outsourcing activities Support the implementation of organizing and using knowledge gained from outsourcing activities

15 Knowledge Management - 15.5 Share Knowledge:

April 3, 2011 327 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 and partners Activities Provide support for creating and maintaining the procedures for sharing knowledge among stakeholders Document and implement the procedures required for sharing knowledge among stakeholders Support the implementation of sharing knowledge among stakeholders

16 Technology Management - Activities:

April 3, 2011 328 16 Technology Management - Activities

16 Technology Management - 16.1 Asset Management:

April 3, 2011 329 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

16 Technology Management - 16.2 License Management:

April 3, 2011 330 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

16 Technology Management - 16.3 Technology Integration:

April 3, 2011 331 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

17 Threat Management - Activities:

April 3, 2011 332 17 Threat Management - Activities

17 Threat Management - 17.1 Outsourcing Risk Management:

April 3, 2011 333 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

17 Threat Management - 17.2 Organisational Risk Management:

April 3, 2011 334 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

17 Threat Management - 17.3 Intellectual Property:

April 3, 2011 335 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 Organization 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

17 Threat Management - 17.4 Security and Privacy:

April 3, 2011 336 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

17 Threat Management - 17.5 Compliance:

April 3, 2011 337 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

17 Threat Management - 17.6 Business Continuity:

April 3, 2011 338 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

Summary:

April 3, 2011 339 Summary Outsourcing experiences and implementations has been poor A structured approach to implementing outsourcing arrangements by both providers and end-users can enable effective outsourcing A common language and a common understanding of roles and responsibilities will reduce problems and assist in issue resolution

More Information:

April 3, 2011 340 More Information Alan McSweeney alan@alanmcsweeney.com