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

Structured Approach toImplementing and OperatingOutsourcing and ManagedServices for Suppliers andOutsourcing OrganisationsAlan McSweeney

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

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

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 April 3, 2011 4

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

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

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 April 3, 2011 7

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

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

Reasons Organisations Outsource Reduce And Control Operating 17% Costs Improve Company Focus 16% Gain Access To World-Class 12% Capabilities Free Resources For Other 12% Purposes Resources Not Available 8% Internally Reduce Time To Market 6% Take Advantage Of 6% Capabilities Accelerate Reengineering 4% Benefits Share Risks 3% Function Difficult To Manage 3% Or Out Of Control April 3, 2011 10

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

Key Issues For Successful Outsourcing• Many outsourcing relationships fail, are terminated early, are unsatisfactory to either or both of the service provider and the client• Outsourcing is a business issues and should be treated as such• Many common issues, problems and concerns arise across outsourcing contracts• Learn from the issues to avoid them April 3, 2011 12

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

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

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

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

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

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

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

Risks in Outsourcing – Lots of Them Outsourcing Risks Strategic Reputation Compliance Operational Termination Financial Country Contract Access Concentration/Systemic April 3, 2011 20

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

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 April 3, 2011 22

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

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

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

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

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

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

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

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

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 April 3, 2011 31

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 April 3, 2011 32

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

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

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

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

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

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

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

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

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

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 April 3, 2011 42

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

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

Phases of Outsourcing RelationshipPhase Outsourcing Organisation Service ProviderAnalysis 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 opportunitiesInitiation Prepare for and transition to provision Prepare for and transition to provision of of service serviceDelivery Provide service and manage and Provide service and manage and measure its measure its provision provisionCompletion Close-out the service after the contract Close-out the service after the contract ends ends or the service has been terminated or the service has been terminatedOngoing Management of outsourcing lifecycle Management of outsourcing lifecycle April 3, 2011 45

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

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

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 April 3, 2011 48

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

Key Capabilities Within Outsourcing Lifecycle forEnd-User Organisations Outsourcing Organisational Governance Relationship Value Strategy Change Management Management Management Management ManagementTechnology PeopleManagement Management Ongoing Threat KnowledgeManagement Management Analysis Initiation Delivery CompletionOutsourcingOpportunity Analysis Outsourcing Outsourcing Outsourcing Planning Agreements Completion Outsourcing Approach Service Sourced Service Provider Services Transfer Evaluation Management April 3, 2011 50

Key Capabilities Within Outsourcing Lifecycle forService Providers and End-User Organisations Outsourcing Capabilities and Skills Analysis Initiation Delivery Ongoing CompletionOutsourcing Outsourcing Service Outsourcing Service Outsourcing Service Outsourcing ServiceOrganisation Organisation Provider Organisation Provider Organisation Provider Organisation Provider Outsourcing Sourced Outsourcing Outsourcing Service Knowledge Outsourcing Service Opportunity Services Contracting Strategy Planning Transfer Management Completion Transfer Analysis Management Management Service Service Design Outsourcing Governance People Provider and Approach Management Management Evaluation Deployment Outsourcing Service Relationship Performance Agreements Delivery Management Management Service Value Relationship Transfer Management Management Organisational Technology Change Management Management People Threat Management Management Knowledge Management Technology Management Threat Management April 3, 2011 51

Key Capabilities and Constituent Practices for OutsourcingService Providers Capabilities and Skills Initiation/ Delivery OngoingCompletion 3 Service 1 Service 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Design and Transfer Delivery Management Management Management Management Management Management Deployment 3.1 4.1 Plan 7.1 1.1 Resources 2.1 5.1 Share 6.1 Encourage 8.1 Client 9.1 Acquire 10.1 Risk Communicate Service Engagement Transferred In Negotiations Knowledge Innovation Interactions Technology Management Requirements Delivery Objectives 5.2 Provide 6.2 8.2 Select 10.2 1.2 Personnel 3.2 Design and 4.2 Train 7.2 Verify 9.2 Technology 2.2 Pricing Required Participation Suppliers and Engagement Transferred In Deploy Service Clients Processes Licenses Information# in Decisions Partners Risk 2.3 Confirm 3.3 Plan Design 8.3 Manage 10.3 Risk 1.3 Service 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control Existing and Suppliers and Across Continuity Service System Environment Resources Technology Conditions Deployment Partners Engagements 1.4 Resources 4.4 Verify 6.4 Assign 7.4 2.4 Market 3.4 Service 5.4 Process 9.4 Technology Transferred Service Responsibilitie Organisational 8.4 Cultural Fit 10.4 Security Information Specification Assets Integration Out Commitments s Objectives 1.5 Personnel 5.5 7.5 Review 8.5 10.5 2.5 Plan 3.5 Service 4.5 Correct 6.5 Define 9.5 Optimise Transferred Engagement Organisational Stakeholder Intellectual Negotiations Design Problems Roles Technology Out Knowledge Performance Information Property 1.6 Knowledge 4.6 Prevent 9.6 Proactively 10.6 Statutory 2.6 Gather 3.6 Design 6.6 Workforce 7.6 Make 8.6 Client Transferred Known 5.6 Reuse Introduce and Regulatory Requirements Feedback Competencies Improvements Relationships Out Problems Technology Compliance 5.7 Version 6.7 Plan and 7.7 Achieve 8.7 Supplier 2.7 Review 3.7 Verify 4.7 Service 10.7 Disaster and Change Deliver Organisational and Partner Requirements Design Modifications Recovery Control Training Objectives Relationships 6.8 Plan and 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 7.8 Capability 8.8 Value Deliver Requirements Service Management Consumption Baselines Creation Training 6.9 2.9 Contract Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 52

Key Capabilities and Constituent Practices for End-User Organisations - 1 Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing Opportunity 6 Service Transfer Approach Planning Evaluation Agreements Management Completion Analysis 3.1 Establish 7.1 Perform 1.1 Define Current 2.1 Outsourcing 4.1 Communicate 5.1 Negotiations 6.1 Service 8.1 Completion Outsourcing Outsourcing State Approach Requirements Guidelines Transition Planning Project Management 4.2 Evaluate 1.2 Outsourcing 3.2 Service 5.2 Confirm 7.2 Performance 8.2 Service 2.2 Business Case Potential Service 6.2 Verify Design Criteria Definition Existing Conditions Monitoring Continuity Providers 3.3 Service 4.3 Select 8.3 Resources 1.3 Demand 2.3 Governance 6.3 Resources 7.3 Financial Provider Selection Candidate Service 5.3 Negotiations Transfer from Identification Model Transferred Out Management Procedures Providers Service Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and 3.4 Evaluation 5.4 Agreement 6.4 Personnel 7.4 Agreement Transfer from Options Risk Analysis Criteria Roles Transferred Out Management Service Provider 3.5 Prepare 7.5 Problem and 8.5 Knowledge 2.5 Outsourcing 5.5 Define SLAs 6.5 Knowledge Service Incident Transfer from Initiation Decision and Measures Transferred Out Requirements Monitoring Service Provider 7.6 Service 5.6 Create Delivery Change Agreements Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 53

Key Capabilities and Constituent Practices for End-User Organisations - 2 Outsourcing Capabilities and Skills Ongoing Phase Competency Governance Environment and Change Focused Focused Focused 139 Outsourcing 10 Governance 11 Relationship 12 Value Organisational 14 People 15 Knowledge 16 Technology 17 Threat Strategy Management Management Management Change Management Management Management ManagementManagement Management 12.1 17.1 10.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing Organisational 16.1 Asset Outsourcing Outsourcing Provider Organisational Outsourcing Required Sponsorship Outsourcing Management Risk Policy Interactions Change Responsibilities Information Performance Management 17.2 10.2 Service 11.2 Service 13.2 9.2 Outsourcing 12.2 Capability 14.2 Personnel 15.2 Knowledge 16.2 License Organisational Provider Provider Stakeholder Constraints Baselines Competencies System Management Risk Management Relationships Involvement Management 14.3 9.3 Potential 10.3 Internal 12.3 Benchmark 11.3 Internal 13.3 Define Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Outsourcing Stakeholder Outsourcing Relationships Future State Outsourcing Information Integration Property Areas Management Processes Competency 10.4 Defined 12.4 Improve 13.4 Human 9.4 Outsourcing 11.4 Issue 14.4 Define 15.4 Lessons 17.4 Security Outsourcing Outsourcing Resource Objectives Management Roles Learned and Privacy Processes Processes Changes 9.5 13.5 10.5 Align Organisational Communicate 15.5 Share Strategy and 11.5 Cultural Fit 12.5 Innovation 17.5 Compliance Outsourcing Organisational Knowledge Architectures Strategy Changes 10.6 Business 11.6 12.6 Business 13.6 17.6 Business Process Collaborative Value and Organisational Continuity Integration Relationships Impact Change 12.7 10.7 Adapt to 11.7 Innovative Outsourcing Business Change Relationships Alignment April 3, 2011 54

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 April 3, 2011 55

Initiation Phase• Service Provider • End-User Organisation• Concerned with preparation for and initiation of • Concerned with preparation for and initiation of service delivery managing outsourced services − Gather requirements − Preparing for service selection by developing the − Perform due diligence to validate customer solicitation and criteria for selection information − Soliciting and evaluating potential service − Assess if and how the requirements can be met providers − Prepare for negotiation − Preparing for negotiation by having an − Negotiate and sign contract organisational position on cost, quality and other topics that need to be negotiated − Confirm assumptions − Defining the formal service level agreements and − Confirm responsibilities and commitments service provider performance measures − Design the service − Understanding service provider’s capabilities by − Review the service design gathering information about the service provider − Create service specification and confirming the assumptions that impact commitments − Deploy the service − Establishing a formal agreement with service − Transfer resources - personnel, technology, providers that clearly articulates the clients’ and infrastructure, applications service provider’s responsibilities and − Transition of service commitments − Providing feedback on the service design in order to ensure that the services are meeting the client’s requirements and the agreed-upon commitments − Managing the effective transfer of resources needed for service delivery, including personnel, technology infrastructure and work environment April 3, 2011 56

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

Ongoing Phase• Service Provider • End-User Organisation• Management functions that need to • Management functions that need to be performed during the entire be performed during the entire outsourcing lifecycle outsourcing lifecycle − Manage and motivate personnel to − Manage and motivate personnel to effectively deliver services effectively deliver services − Manage relationships with clients, − Manage relationships with clients, suppliers and business partners suppliers and business partners − Measure and review the organisation’s − Measure and review the organisation’s performance and taking action to performance and taking action to improve it improve it − Manage information and knowledge − Manage information and knowledge systems so that personnel have access systems so that personnel have access to the knowledge needed to to the knowledge needed to effectively perform their work effectively perform their work − Identify and control threats to the − Identify and control threats to the organisation’s ability to meet its organisation’s ability to meet its objectives and client requirements objectives and client requirements − Manage the technology, systems and − Manage the technology, systems and applications infrastructure used to applications infrastructure used to support delivery of service support delivery of service April 3, 2011 58

Completion Phase• Service Provider • End-User Organisation• Concerned with closing down the • Concerned with closing down the engagement at the end of the outsourcing engagement at the end of the outsourcing lifecycle lifecycle − Manage the transfer of resources to the − Planning for closing down a outsourced new service provider, whether it is to the service and managing the agreement during client or to another service provider the close-down period including managing − Ensure service continuity during transfer the agreement during termination − Identify and transferring the knowledge proceedings, during renewal, or during critical for the delivery of service normal completion − Managing the transfer of resources to the new service provider, whether it is to back to the organisation or to another service provider including the potential transfer of people, technology infrastructure and intellectual property − Ensuring service continuity during the transfer of responsibilities for service provision − Identifying and transferring the knowledge capital critical for the delivery of service April 3, 2011 59

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

Outsourcing for Service Providers April 3, 2011 61

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

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 April 3, 2011 63

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

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 April 3, 2011 65

Completion Phase• Concerned with closing down the engagement at the end of the outsourcing lifecycle − Manage the transfer of resources to the new service provider, whether it is to the client or to another service provider − Ensure service continuity during transfer − Identify and transferring the knowledge critical for the delivery of service April 3, 2011 66

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 April 3, 2011 67

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

Key Capabilities and Constituent Practices Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 69

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 April 3, 2011 70

Key Issues For Successful Outsourcing• Many outsourcing relationships fail, are terminated early, are unsatisfactory to either or both of the service provider and the client• Outsourcing is a business issues and should be treated as such• Many common issues, problems and concerns arise across outsourcing contracts• Learn from the issues to avoid them April 3, 2011 71

Key Issues For Successful Outsourcing1. Establishing and maintaining trust with stakeholders2. Managing stakeholder expectations3. Translating implicit and explicit needs into defined requirements with agreed- upon levels of quality4. Establishing well-defined contracts with stakeholders, including clients, suppliers and partners5. Reviewing service design and deployment to ensure adequate coverage of the requirements6. Ensuring the effectiveness of interactions with stakeholders7. Managing supplier and partner relationships to ensure that commitments are met8. Ensuring compliance with statutory and regulatory requirements9. Managing clients’ security10. Managing cultural differences between stakeholders11. Monitoring and controlling activities to consistently meet the service delivery commitments April 3, 2011 72

Key Issues For Successful Outsourcing12. Monitoring and managing clients’ and end-users’ satisfaction13. Building and maintaining the competencies that enable personnel to effectively perform their roles and responsibilities14. Managing employee satisfaction, motivation and retention15. Establishing and maintaining an effective work environment16. Maintaining a competitive advantage17. Innovating, building flexibility and increasing responsiveness to meet unique and evolving client requirements18. Managing rapid technological shifts and maintaining the availability, reliability, accessibility and security of technology19. Capturing and using knowledge20. Smoothly transferring services and resources21. Maintaining continuity of the service delivery22. Capturing and transferring knowledge gained to the client during contract completion23. Measuring and analysing the reasons for termination, to prevent reoccurrence April 3, 2011 73

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

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

Issue 3 - Translating Implicit And Explicit Needs Into DefinedRequirements 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 April 3, 2011 76

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

Issue 5 - Reviewing Service Design And DeploymentTo Ensure Adequate Coverage Of The Requirements• Failure in outsourcing can be caused by the service provider not fully addressing the needs of the client• To ensure that the service delivery will meet the client’s needs, successful engagements include rigorous reviews of the service design and deployment activities by the clients and the service provider prior to service delivery April 3, 2011 78

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

Issue 7 - Managing Supplier And PartnerRelationships To Ensure That Commitments Are Met• Outsourcing engagements can include multiple service providers working together to meet the client’s needs• Regardless of the type of relationship suppliers and partners can have a significant impact on the effectiveness of the service delivery and they must be actively managed April 3, 2011 80

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

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

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

Issue 11 - Monitoring And Controlling Activities ToConsistently Meet The Service Delivery Commitments• Successful service providers monitor their service delivery activities to ensure that the client’s commitments are being met• Actions are taken to resolve and prevent problems, thereby escalating issues as appropriate to ensure that they are addressed in a timely basis April 3, 2011 84

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

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

Issue 14 - Managing Employee Satisfaction,Motivation And Retention• IT-enabled outsourcing often involves challenges during transition and deployment and service delivery• High employee turnover jeopardises the service provider’s ability to meet its clients’ requirements and undermines their expected gains and performance levels• Proactively monitoring and managing employee satisfaction and motivation can improve personnel retention and effectiveness April 3, 2011 87

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

Issue 16 - Maintaining A Competitive Advantage• Service providers need to effectively demonstrate their capabilities relative to competitors• Initially done to differentiate the service provider from the competition in such a way that they will be chosen over other providers• Done to continually improve the organisation’s capabilities and demonstrate to clients that the current service provider is the organisation best equipped to meet clients’ changing needs• Important aspect of being competitive is demonstrating financial stability and longevity April 3, 2011 89

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

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

Issue 19 - Capturing And Using Knowledge• Managing knowledge is critical to a service provider’s ability to avoid rework and improve the consistency and quality of work performed by personnel• includes the effective storage, retrieval and use of knowledge gained on engagements April 3, 2011 92

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

Issue 21 - Maintaining Continuity Of The ServiceDelivery• Effectiveness of outsourcing is related to the service provider’s ability to maintain service continuity despite any problems that arise• Successful providers manage service continuity by effectively controlling and preventing problems during service delivery, preparing and responding to threats and coordinating the transfer of service during periods of transition April 3, 2011 94

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

Issue 23 - Measuring And Analysing The Reasons forTermination to prevent Reoccurrence• Termination may happen for a number of reasons, including an inability of the service provider to meet changing client needs, resolve problems, meet commitments, or match the capabilities of competitors• Analysing the reasons for termination and taking action based on the findings helps to prevent issues from recurring with other clients and ensure the long-term success of the service provider April 3, 2011 96

Key Capabilities and Constituent Practices Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 97

1 Service Transfer - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 98

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

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

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

1 Service Transfer - 1.4 Resources Transferred Out• Scope − Establish and implement procedures to transfer resources from the organisation • Manage the transfer of resources in order to help ensure a smooth hand- over and improve the client’s satisfaction, thereby establishing a basis for future relationships with the client• Activities − Provide support for creating and maintaining the procedures for transferring resources from the organisation − Document and implement the procedures for transferring resources from the organisation − Support the implementation of the procedures for transferring resources from the organisation April 3, 2011 102

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

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 April 3, 2011 104

2 Contracting - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 105

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 April 3, 2011 106

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

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 April 3, 2011 108

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

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

2 Contracting - 2.6 Gather Requirements• Scope − Establish and implement procedures to gather a client’s requirements• Activities − Provide support for creating and maintaining the procedures for gathering requirements − Document and implement the procedures for gathering requirements − Support the implementation of the procedures for gathering requirements April 3, 2011 111

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

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

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

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

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

3 Service Design and Deployment - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 117

3 Service Design and Deployment - 3.1Communicate Requirements• Scope − Establish and implement procedures to communicate the client’s requirements to the service design and deployment team• Activities − Provide support for creating and maintaining the procedures for communicating requirements − Document and implement the procedures for communicating requirements − Support the implementation of the procedures for communicating requirements April 3, 2011 118

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

3 Service Design and Deployment - 3.3 Plan Designand 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 April 3, 2011 120

3 Service Design and Deployment - 3.4 ServiceSpecification• Scope − Create the service specification • Create a service specification that clearly, accurately and comprehensively describes the services to be provided in order to effectively meet the client’s requirements • Service specification is the basis for designing, deploying and delivering service. It is a comprehensive document that describes the services that the organisation provides to the client and describes how end-users request services • Describes the available services, the agreed-upon service levels, if any and the interfaces between the organisation, the clients and the end-users • As the service evolves over time, the service specification is modified to document the changing expectations of the client and the organisation• Activities − Provide support for creating and maintaining the work products and tasks for creating the service specification − Document and implement the work products and tasks required for creating the service specification − Support the implementation of creating the service specification April 3, 2011 121

3 Service Design and Deployment - 3.5 ServiceDesign• Scope − Create the service design based on the service specification • Ensure that the service design is based on the client’s requirements and the set of services specified in the agreed-upon service specification in order to effectively meet the client’s requirements• Activities − Provide support for creating and maintaining the work products and tasks for creating the service design − Document and implement the work products and tasks required for creating the service design − Support the implementation of creating the service design April 3, 2011 122

3 Service Design and Deployment - 3.6 DesignFeedback• Scope − Establish and implement procedures to obtain feedback from the client on the designed service and to incorporate necessary changes• Activities − Provide support for creating and maintaining the procedures for obtaining service design feedback − Document and implement the procedures for obtaining service design feedback − Support the implementation of the procedures for obtaining service design feedback April 3, 2011 123

3 Service Design and Deployment - 3.7 Verify Design• Scope − Establish and implement procedures to review and verify the service design• Activities − Provide support for creating and maintaining the procedures for service design review and verification across the organisation − Document and implement the procedures for service design review and verification − Support the implementation of the procedures for service design review and verification April 3, 2011 124

3 Service Design and Deployment - 3.8 DeployService• Scope − Deploy the service based on the service design• Activities − Provide support for creating and maintaining the work products and tasks for deploying the service − Document and implement the work products and tasks required for deploying the service − Support the implementation of deploying the service April 3, 2011 125

4 Service Delivery - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 126

4 Service Delivery - 4.1 Plan Service Delivery• Scope − Plan and track the service delivery according to the service design• Activities − Provide support for creating and maintaining the work products and tasks for planning and tracking the service delivery − Document and implement the work products and tasks required for planning and tracking service delivery − Support the implementation of planning and tracking the service delivery April 3, 2011 127

4 Service Delivery - 4.2 Train Clients• Scope − Establish and implement procedures to train clients and end-users• Activities − Provide support for creating and maintaining the procedures for training clients and end-users − Document and implement the procedures for training clients and end-users − Support the implementation of the procedures for training clients and end-users April 3, 2011 128

4 Service Delivery - 4.3 Deliver Service• Scope − Deliver service according to the service delivery plans• Activities − Provide support for creating and maintaining the work products and tasks for delivering service − Document and implement the work products and tasks required for delivering service − Support the implementation of delivering service April 3, 2011 129

4 Service Delivery - 4.4 Verify Service Commitments• Scope − Establish and implement procedures to measure and verify that service commitments are being met• Activities − Provide support for creating and maintaining the procedures for verifying service commitments − Document and implement the procedures for verifying service commitments − Support the implementation of the procedures for verifying service commitments April 3, 2011 130

4 Service Delivery - 4.5 Correct Problems• Scope − Establish and implement procedures to correct problems• Activities − Provide support for creating and maintaining the procedures for correcting problems − Document and implement the procedures for correcting problems − Support the implementation of the procedures for correcting problems April 3, 2011 131

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 April 3, 2011 132

4 Service Delivery - 4.7 Service Modifications• Scope − Establish and implement procedures to make modifications to services• Activities − Provide support for creating and maintaining the procedures for modifying services − Document and implement the procedures for modifying services − Support the implementation of the procedures for modifying services April 3, 2011 133

4 Service Delivery - 4.8 Financial Management• Scope − Establish and implement procedures for financial management of the engagement• Activities − Provide support for creating and maintaining the procedures for financial management of the engagement − Document and implement the procedures for the financial management of the engagement − Support the implementation of the procedures for financial management of the engagement April 3, 2011 134

5 Knowledge Management - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 135

5 Knowledge Management - 5.1 Share Knowledge• Scope − Establish and implement a policy to share knowledge among stakeholders• Activities − Provide support for creating and maintaining a policy for sharing knowledge among stakeholders across the organisation − Document and implement a policy for sharing knowledge among stakeholders − Support the implementation of a policy for sharing knowledge among stakeholders across the organisation April 3, 2011 136

5 Knowledge Management - 5.2 Provide RequiredInformation• 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 April 3, 2011 137

5 Knowledge Management - 5.3 Knowledge System• Scope − Establish and maintain a knowledge system to identify, control and provide information• Activities − Provide support for creating and maintaining the work products and tasks for establishing and maintaining a knowledge system for use across the organisation − Document and implement work products and tasks required for establishing and maintaining a knowledge system − Support the implementation of establishing and maintaining a knowledge system for use across the organisation April 3, 2011 138

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 April 3, 2011 139

5 Knowledge Management - 5.5 EngagementKnowledge• Scope − Analyse and use knowledge gained from client engagements• Activities − Provide support for creating and maintaining the work products and tasks for analysing and using knowledge gained from client engagements across the organisation − Document and implement work products and tasks required for analysing knowledge gained from client engagements − Support the implementation of analysing and using knowledge gained from client engagements across the organisation April 3, 2011 140

5 Knowledge Management - 5.6 Reuse• Scope − Identify and reuse work products• Activities − Provide support for creating and maintaining the work products and tasks for identifying and reusing work products across the organisation − Document and implement work products and tasks required for identifying and reusing work products − Support the implementation of identifying and reusing work products across the organisation April 3, 2011 141

5 Knowledge Management - 5.7 Version and ChangeControl• 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 April 3, 2011 142

5 Knowledge Management - 5.8 ResourceConsumption• Scope − Establish and implement procedures to analyse and use information on resources consumed• Activities − Provide support for creating and maintaining the procedures for analysing and using information on resource consumption − Document and implement the procedures for analysing and using information on resource consumption − Support the implementation of the procedures for analysing and using information on resource consumption April 3, 2011 143

6 People Management - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 144

6 People Management - 6.1 Encourage Innovation• Scope − Establish and implement a policy to encourage and support innovation across the organisation• Activities − Provide support for creating and maintaining a policy for encouraging and supporting innovation across the organisation − Document and implement a policy for encouraging and supporting innovation across the organisation − Support the implementation of a policy for encouraging and supporting innovation across the organisation April 3, 2011 145

6 People Management - 6.2 Participation inDecisions• 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 April 3, 2011 146

6 People Management - 6.3 Work Environment• Scope − Establish and maintain a work environment that enables personnel to work effectively• Activities − Provide support for creating and maintaining the work products and tasks for establishing and maintaining a work environment that enables personnel to work effectively − Document and implement the work products and tasks required for establishing and maintaining an effective work environment − Support the implementation of establishing and maintaining a work environment that enables personnel to work effectively April 3, 2011 147

6 People Management - 6.4 Assign Responsibilities• Scope − Assign roles and responsibilities to personnel based on appropriate personnel competencies• Activities − Provide support for creating and maintaining the work products and tasks for assigning roles and responsibilities to personnel − Document and implement the work products and tasks required for assigning roles and responsibilities to personnel − Support the implementation of assigning roles and responsibilities to personnel April 3, 2011 148

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 April 3, 2011 149

6 People Management - 6.6 WorkforceCompetencies• Scope − Develop the workforce competencies needed to achieve organisational objectives• Activities − Provide support for creating and maintaining the work products and tasks for developing workforce competencies − Document and implement the work products and tasks required for developing workforce competencies − Support the implementation of developing workforce competencies April 3, 2011 150

6 People Management - 6.7 Plan and DeliverTraining• Scope − Establish and implement procedures to plan and deliver training• Activities − Provide support for creating and maintaining the procedures for planning and delivering training across the organisation − Document and implement the procedures for planning and delivering training − Support the implementation of the procedures for planning and delivering training across the organisation April 3, 2011 151

6 People Management - 6.8 Plan and DeliverTraining• Scope − Meet identified personnel competency needs by providing training• Activities − Provide support for creating and maintaining the work products and tasks for meeting identified personnel competency needs − Document and implement the work products and tasks required for meeting personnel competency needs − Support the implementation of meeting identified personnel competency needs April 3, 2011 152

6 People Management - 6.9 Performance Feedback• Scope − Establish and implement procedures to provide feedback on performance to personnel• Activities − Provide support for creating and maintaining the procedures for providing performance feedback to personnel across the organisation − Document and implement the procedures for providing performance feedback to personnel − Support the implementation of the procedures for providing performance feedback to personnel across the organisation April 3, 2011 153

6 People Management - 6.10 Performance Feedback• Scope − Establish and implement procedures to provide personnel with opportunities for career development• Activities − Provide support for creating and maintaining the procedures for career development across the organisation − Document and implement the procedures for career development − Support the implementation of the procedures for career development across the organisation April 3, 2011 154

6 People Management - 6.11 Rewards• Scope − Provide rewards and recognition that encourage the achievement of organisational objectives• Activities − Provide support for creating and maintaining the work products and tasks for providing rewards and recognition that encourage the achievement of organisational objectives − Document and implement the work products and tasks required for establishing rewards and recognition to encourage the achievement of organisational objectives − Support the implementation of providing rewards and recognition that encourage the achievement of organisational objectives April 3, 2011 155

7 Performance Management - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 156

7 Performance Management - 7.1 EngagementObjectives• Scope − Define, communicate and track engagement objectives• Activities − Provide support for creating and maintaining the work products and tasks for defining, communicating and tracking engagement objectives − Document and implement the work products and tasks required for defining, communicating and tracking engagement objectives − Support the implementation of defining, communicating and tracking engagement objectives April 3, 2011 157

7 Performance Management - 7.2 Verify Processes• Scope − Establish and implement procedures to verify that processes are consistently performed as defined• Activities − Provide support for creating and maintaining the procedures for verifying that processes are consistently performed as defined − Document and implement the procedures for verifying that processes are consistently performed as defined − Support the implementation of the procedures for verifying that processes are consistently performed as defined April 3, 2011 158

7 Performance Management - 7.3 AdequateResources• Scope − Identify and provide adequate resources that personnel need to perform their work• Activities − Provide support for creating and maintaining the work products and tasks for identifying and providing adequate resources to personnel − Document and implement the work products and tasks required for identifying and providing adequate resources to personnel − Support the implementation of identifying and providing adequate resources to personnel April 3, 2011 159

7 Performance Management - 7.4 OrganisationalObjectives• Scope − Define, communicate and track organisational objectives• Activities − Provide support for creating and maintaining the work products and tasks for defining, communicating and tracking organisational objectives − Document and implement the work products and tasks required for defining, communicating and tracking organisational objectives − Support the implementation of defining, communicating and tracking organisational objectives April 3, 2011 160

7 Performance Management - 7.5 ReviewOrganisational Performance• Scope − Establish and implement procedures to review organisational performance• Activities − Provide support for creating and maintaining the procedures for reviewing organisational performance − Document and implement the procedures for reviewing organisational performance − Support the implementation of the procedures for reviewing organisational performance April 3, 2011 161

7 Performance Management - 7.6 MakeImprovements• Scope − Make improvements based on reviews of organisational performance• Activities − Provide support for creating and maintaining the work products and tasks for making improvements across the organisation − Document and implement the work products and activities required to make improvements − Support the implementation of making improvements across the organisation April 3, 2011 162

7 Performance Management - 7.7 AchieveOrganisational Objectives• Scope − Establish and implement programs to achieve organisational objectives• Activities − Provide support for creating and maintaining the work products and tasks for establishing and implementing programs to achieve organisational objectives − Document and implement the work products and tasks required for establishing programs to achieve organisational objectives − Support the implementation of programs to achieve organisational objectives April 3, 2011 163

7 Performance Management - 7.8 CapabilityBaselines• Scope − Define capability baselines for the organisation by analysing performance data• Activities − Provide support for creating and maintaining the work products and tasks for defining capability baselines − Document and implement the work products and tasks required for defining capability baselines − Support the implementation of defining capability baselines April 3, 2011 164

7 Performance Management - 7.9 Benchmark• Scope − Benchmark organisational performance to identify opportunities for improvement• Activities − Provide support for creating and maintaining the work products and tasks for benchmarking organisational performance − Document and implement the work products and tasks required for benchmarking organisational performance − Support the implementation of benchmarking organisational performance April 3, 2011 165

7 Performance Management - 7.10 PreventPotential 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 April 3, 2011 166

7 Performance Management - 7.11 DeployInnovations• Scope − Establish and implement programs to deploy innovations across the organisation• Activities − Provide support for creating and maintaining the work products and tasks for establishing and implementing programs to deploy innovations across the organisation − Document and implement the work products and tasks required for establishing programs to deploy innovations − Support the implementation of programs to deploy innovations across the organisation April 3, 2011 167

8 Relationship Management - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 168

8 Relationship Management - 8.1 Client Interactions• Scope − Establish and implement procedures to manage interactions with clients• Activities − Provide support for creating and maintaining the procedures for managing client interactions − Document and implement the procedures for managing client interactions − Support the implementation of the procedures for managing client interactions April 3, 2011 169

8 Relationship Management - 8.2 Select Suppliersand Partners• Scope − Establish and implement procedures to select suppliers and partners based on their ability to meet identified requirements• Activities − Provide support for creating and maintaining the procedures for selecting suppliers and partners − Document and implement the procedures for selecting suppliers and partners − Support the implementation of the procedures for selecting suppliers and partners April 3, 2011 170

8 Relationship Management - 8.3 Manage Suppliersand Partners• Scope − Manage the performance of suppliers and partners against their commitments• Activities − Provide support for creating and maintaining the work products and tasks for managing the performance of suppliers and partners − Document and implement the work products and tasks required for managing the performance of suppliers and partners − Support the implementation of managing the performance of suppliers and partners April 3, 2011 171

8 Relationship Management - 8.4 Cultural Fit• Scope − Identify cultural attributes that impact the service and implement actions to achieve a cultural fit• Activities − Provide support for creating and maintaining the work products and tasks for achieving a cultural fit across the organisation − Document and implement the work products and tasks required for achieving a cultural fit − Support the implementation of achieving a cultural fit across the organisation April 3, 2011 172

8 Relationship Management - 8.5 StakeholderInformation• Scope − Analyse and use client and other stakeholder information• Activities − Provide support for creating and maintaining the work products and tasks for analysing and using client and other stakeholder information − Document and implement the work products and tasks required for analysing client and other stakeholder information − Support the implementation of analysing and using client and other stakeholder information April 3, 2011 173

8 Relationship Management - 8.6 ClientRelationships• Scope − Establish and implement procedures to manage client relationships• Activities − Provide support for creating and maintaining the procedures for managing client relationships across the organisation − Document and implement the procedures for managing client relationships − Support the implementation of the procedures for managing client relationships across the organisation April 3, 2011 174

8 Relationship Management - 8.7 Supplier andPartner Relationships• Scope − Establish and implement procedures to manage relationships with suppliers and partners• Activities − Provide support for creating and maintaining the procedures for managing relationships with suppliers and partners across the organisation − Document and implement the procedures for managing relationships with suppliers and partners − Support the implementation of the procedures for managing relationships with suppliers and partners across the organisation April 3, 2011 175

8 Relationship Management - 8.8 Value Creation• Scope − Proactively identify value creation opportunities and communicate them to the client• Activities − Provide support for creating and maintaining the work products and tasks for proactively identifying and communicating value creation opportunities across the organisation − Document and implement the work products and tasks proactively required for identifying and communicating value creation opportunities − Support the implementation of proactively identifying and communicating value creation opportunities across the organisation April 3, 2011 176

9 Technology Management - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 177

9 Technology Management - 9.1 Acquire Technology• Scope − Establish and implement procedures to acquire and deploy technology• Activities − Provide support for creating and maintaining the procedures for acquiring and deploying technology − Document and implement the procedures for acquiring and deploying technology − Support the implementation of the procedures for acquiring and deploying technology April 3, 2011 178

9 Technology Management - 9.2 TechnologyLicenses• Scope − Establish and implement procedures to manage technology licenses• Activities − Provide support for creating and maintaining the procedures for managing technology licenses − Document and implement the procedures for managing technology licenses − Support the implementation of the procedures for managing technology licenses April 3, 2011 179

9 Technology Management - 9.3 Control Technology• Scope − Establish and implement procedures to track and control changes to the technology infrastructure• Activities − Provide support for creating and maintaining the procedures for tracking and controlling changes to the technology infrastructure − Document and implement the procedures for tracking and controlling changes to the technology infrastructure − Support the implementation of the procedures for tracking and controlling changes to the technology infrastructure April 3, 2011 180

9 Technology Management - 9.4 TechnologyIntegration• Scope − Establish and implement procedures to manage integration of the organisation’s technology infrastructure• Activities − Provide support for creating and maintaining the procedures for managing integration of the technology infrastructure − Document and implement the procedures for managing integration of the technology infrastructure − Support the implementation of the procedures for managing integration of the technology infrastructure April 3, 2011 181

9 Technology Management - 9.5 OptimiseTechnology• Scope − Optimise the overall performance of the technology infrastructure needed to deliver all services• Activities − Provide support for creating and maintaining the work products and tasks for optimising the technology infrastructure across the organisation − Document and implement the work products and tasks required for optimising the technology infrastructure − Support the implementation of optimising the technology infrastructure across the organisation April 3, 2011 182

9 Technology Management - 9.6 ProactivelyIntroduce Technology• Scope − Establish and implement procedures to proactively identify and introduce appropriate technology• Activities − Provide support for creating and maintaining the procedures for proactively identifying and introducing technology across the organisation − Document and implement the procedures for proactively identifying and introducing technology − Support the implementation of the procedures for proactively identifying and introducing technology across the organisation April 3, 2011 183

10 Threat Management - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 3, 2011 184

10 Threat Management - 10.1 Risk Management• Scope − Establish and implement a policy on risk management• Activities − Provide support for creating and maintaining a policy for managing risk − Document and implement a policy for managing risk − Support the implementation of a policy for managing risk April 3, 2011 185

10 Threat Management - 10.2 Engagement Risk• Scope − Identify, assess and manage risks specific to the client engagement• Activities − Provide support for creating and maintaining the work products and tasks for identifying, assessing and managing engagement- specific risks − Document and implement the work products and activities required to identify, assess and manage engagement-specific risks − Support the implementation of identifying, assessing and managing engagement-specific risks April 3, 2011 186

10 Threat Management - 10.3 Risk AcrossEngagements• 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 April 3, 2011 187

10 Threat Management - 10.4 Security• Scope − Establish and implement procedures to meet security requirements• Activities − Provide support for creating and maintaining the procedures for meeting security requirements − Document and implement the procedures for meeting security requirements − Support the implementation of the procedures for meeting security requirements April 3, 2011 188

10 Threat Management - 10.5 Intellectual Property• Scope − Establish and implement procedures to protect the intellectual property of stakeholders• Activities − Provide support for creating and maintaining the procedures for protecting the intellectual property of stakeholders − Document and implement the procedures for protecting the intellectual property of stakeholders − Support the implementation of the procedures for protecting the intellectual property of stakeholders April 3, 2011 189

10 Threat Management - 10.6 Statutory andRegulatory Compliance• Scope − Establish and implement procedures to comply with statutory and regulatory requirements• Activities − Provide support for creating and maintaining the procedures for statutory and regulatory compliance − Document and implement the procedures for statutory and regulatory compliance − Support the implementation of the procedures for statutory and regulatory compliance April 3, 2011 190

10 Threat Management - 10.7 Disaster Recovery• Scope − Establish and implement disaster recovery procedures• Activities − Provide support for creating and maintaining the procedures for disaster recovery − Document and implement the procedures for disaster recovery − Support the implementation of the procedures for disaster recovery April 3, 2011 191

Outsourcing for End-User Organisations April 3, 2011 192

Outsourcing Challenges• Establishing an appropriate outsourcing strategy• Identifying capabilities that could be outsourced• Developing appropriate approaches for outsourcing activities• Managing risks throughout their outsourcing activities• Identifying, selecting and negotiating with service providers• Conducting service provider governance and performance management• Managing relationships with their service providers April 3, 2011 193

Reasons for Adopting a Structured Approach toOutsourcing• Provides a focus on outsourcing management for IT-enabled services• Builds confidence and trust with all stakeholders• Enables effective communication with all stakeholders• Provides increased agility through improved capability to effectively manage change• Enables risks to be managed effectively• Provides effective business controls• Enables continual improvement of process and performance• Allows the organisation to focus on core competencies and strategic operations• Builds and sustains the competence to effectively manage the outsourcing strategy and outsourcing engagements• Improves outsourcing governance• Allows enhanced supplier/partner relationship management capabilities• Provides for service measurement that supports action April 3, 2011 194

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 April 3, 2011 195

Outsourcing Organisation Issue 1 - Establishing aStrategy For the Organisation’s OutsourcingActivities• May not have sufficient focus on analysis, initiation and completion activities• May not have a strategy for outsourcing or may have a strategy that is not synchronised or aligned with the IT or corporate strategies• Outsourcing strategy should − Clearly describe outsourcing objectives − Be aligned with with the organisation’s business, growth and continuity strategies − Be defined, documented and followed − Be regularly updated as conditions change. − Guide analysis activities to prepare for and overcome difficulties in the initial decision making − Ensure that the organisation understands which capabilities or processes (strategic/non-strategic, core/non-core, or key/non-key) should be retained in the organisation − Consider if non-core activities are being outsourced too automatically − Ensure that the organisation gives adequate consideration to the full economic impact of its outsourcing activities April 3, 2011 196

Outsourcing Organisation Issue 2 - Being anInformed Buyer of Outsourcing Services• Be an informed customer of outsourcing services• Decisions often made to outsource without considering the fit with broader or long-term business strategies, the impact on short-term organisational performance, whether outsourcing is appropriate or if they are joining a fad, or the risks of losing internal expertise• Be actively involved in managing the activities in the analysis and initiation phases of the outsourcing lifecycle• Outsourcing should be a part of the organisation’s process management approach• Develop a competency in outsourcing and managing outsourcing relationships• Many view their outsourcing activities as separate isolated projects• Avoid “distress outsourcing” - outsourcing a problem area as a way to solve that problem - often leads to more distress − Passing a problem to a service provider does not eliminate the problem - it increases the number of parties involved in or trying to solve it April 3, 2011 197

Outsourcing Organisation Issue 3 - ActivelyManaging Outsourcing Risks• Outsourcing is not the transfer the governance, accountability or risks associated with the outsourced activity• Client organisations should actively identify, manage and mitigate all relevant risks − Poor strategic planning with respect to outsourcing − Inadequate alignment of the outsourcing strategy, corporate strategy and IT strategies − Potential changes in client’s business practices and processes − In-house resistance and poor communication − Change management efforts are often neglected or ignored − Lack of clear division of responsibilities between client organisations and their service providers − Communications difficulties with the service providers due to cultural differences or poorly-defined service provider interactions − Potential dependency on service providers − Reputation risks, where a highly visible problem at the service provider is a potential problem for the client due to adverse publicity April 3, 2011 198

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

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 April 3, 2011 200

Analysis Phase• Concerned with analysing operations and functions to identify those services, processes, or functions that could potentially be outsourced − Understanding the current, or as-is, state of the client organisation’s structure and processes − Identifying the relevant criteria for selecting outsourcing opportunities − Identifying outsourcing opportunities to meet outsourcing objectives and criteria − Organising options for outsourcing − Developing and validating the Business Case for each outsourcing option − Identifying the outsourcing approach and governance model for the proposed outsourcing action − Performing impact and risk analyses of the proposed outsourcing action − Making the decision whether or not to source the proposed outsourcing action April 3, 2011 201

Initiation Phase• Concerned with preparation for and initiation of managing outsourced services − Preparing for service selection by developing the solicitation and criteria for selection − Soliciting and evaluating potential service providers − Preparing for negotiation by having an organisational position on cost, quality and other topics that need to be negotiated − Defining the formal service level agreements and service provider performance measures − Understanding service provider’s capabilities by gathering information about the service provider and confirming the assumptions that impact commitments − Establishing a formal agreement with service providers that clearly articulates the clients’ and service provider’s responsibilities and commitments − Providing feedback on the service design in order to ensure that the services are meeting the client’s requirements and the agreed-upon commitments − Managing the effective transfer of resources needed for service delivery, including personnel, technology infrastructure and work environment April 3, 2011 202

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 April 3, 2011 203

Completion Phase• Concerned with closing down the engagement at the end of the outsourcing lifecycle − Planning for closing down a outsourced service and managing the agreement during the close-down period including managing the agreement during termination proceedings, during renewal, or during normal completion − Managing the transfer of resources to the new service provider, whether it is to back to the organisation or to another service provider including the potential transfer of people, technology infrastructure and intellectual property − Ensuring service continuity during the transfer of responsibilities for service provision − Identifying and transferring the knowledge capital critical for the delivery of service April 3, 2011 204

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 April 3, 2011 205

Key Capabilities Within Outsourcing Lifecycle forEnd-User Organisations Outsourcing Organisational Governance Relationship Value Strategy Change Management Management Management Management ManagementTechnology PeopleManagement Management Ongoing Threat KnowledgeManagement Management Analysis Initiation Delivery CompletionOutsourcingOpportunity Analysis Outsourcing Outsourcing Outsourcing Planning Agreements Completion Outsourcing Approach Service Sourced Service Provider Services Transfer Evaluation Management April 3, 2011 206

Key Capabilities and Constituent Practices of Outsourcing Process - 1 Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 207

Key Capabilities and Constituent Practices ofOutsourcing Process - 2 Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 208

Key Capabilities and Constituent Practices• Idealised set of steps for an organisation looking to outsource to perform when initiating the project• Provides a detailed checklist of work to be done• Each practices contains a set of activities and tasks• Can be modified to suit the circumstances: scope of outsourcing, size of system/application being outsourced, duration of contract• Can forms the basis of a project plan for elements of outsourcing work such as initiation• Reduces risk of failure• Assists with the selection of the most suitable outsourcing partner April 3, 2011 209

Analysis Phase - Outsourcing Opportunity Analysis• Functional analysis of the current operations of the organisation and identification of potential functions, processes or services that could be outsourced• Addresses the critical issues of being an informed buyer of outsourcing services and translating implicit and explicit needs into defined requirements with agreed-upon levels of quality• Document the current state and understand the current business processes of the organisation• Determine the criteria for selecting outsourcing opportunities• Organise outsourcing opportunities April 3, 2011 210

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 April 3, 2011 211

Initiation Phase - Outsourcing Planning• Planning for implementation of the outsourcing approach for a planned outsourcing initiative• Establishing a capability to plan and manage the outsourced service. Getting all the resources, including manpower, ready to execute the outsourcing agreement• Developing a outsourcing plan for a planned outsourcing activity• Developing the Service(s) Requirements Document or Service(s) Definitions Document and having the basic structure of the agreement in place• Developing any documentation needed to communicate the client’s inquiries, requests and requirements to prospective service providers April 3, 2011 212

Initiation Phase - Service Provider Evaluation• Soliciting potential service providers, screening the set of potential service providers and selecting the preferred service providers• Comparing and assessing alternative solutions and service providers in their ability to create business value, benefits and cost savings, delivery service quality and flexibility to accommodate business changes throughout the planned duration of the agreement April 3, 2011 213

Initiation Phase - Outsourcing Agreements• Carrying out service confirmation, negotiating terms and conditions of the agreements and entering into an agreement with the selected service providers• Dealing with renegotiation and making changes to agreements• Preparing for negotiation by having an organisational position on cost and other topics that need to be negotiated• Defining formal service level agreements and service provider performance measures• Understanding service provider’s capabilities by gathering information about the service provider• Working with service providers to confirm the assumptions that impact commitments.• Establishing a formal agreement with service providers that clearly articulates the clients’ and service provider’s responsibilities and commitments April 3, 2011 214

Initiation Phase - Service Transfer• Successfully transferring resources between the client organisation and its service providers by creating and implementing a transfer plan; creating client/service provider teams; identifying key skill sets/personnel to retain in-house or transfer to the service providers; ensuring service design meets the client’s needs; and transferring resources, personnel and knowledge to service provider• Planning and managing the service transfer• Reviewing the service provider’s service design information• Transferring knowledge and personnel to the service provider• Transferring resources, including technology infrastructure and work environment to the service provider April 3, 2011 215

Delivery Phase - Sourced Services Management• Having the capability to manage service providers and the issues and challenges that arise after the agreement has been reached• Focus on operational issues like measuring performance against the SLAs, monitoring SLAs, managing performance and taking corrective action, if required.• Responsibility for managing and monitoring the financial control for the agreement• Responsibility for the administration of the agreement and ensuring that the service provider is executing according to the terms and conditions of the agreement• Focus on managing relations with the service providers of a outsourced service, addressing fostering realistic expectations of the service provider performance (expectation management) and managing problems• Managing changes• Reviewing the service provider’s performance against the agreed-upon deliverables required business benefits, soliciting and evaluating feedback from stakeholders and reviewing performance against the agreed upon service commitments and deliverables April 3, 2011 216

Completion Phase - Outsourcing Completion• Planning and making provisions for the closure of the relationship/project and ensuring that the hand off is smooth• Assessing the outcome of the outsourced service as well as the performance of the service provider and in-house teams• Ensure continuity of service during completion• Ensuring that the project effectiveness, lessons learned, best practices and key project metrics are documented• Enable evaluation of performance measures across other outsourcing projects to serve as guides for undertaking future outsourcing initiatives• Following a formal process for concluding the outsourced service, ensuring all deliverables are consolidated (code, system documentation, etc) and are handed back to the client, along with required knowledge transfer, as directed by the client organisation April 3, 2011 217

Ongoing Phase - Outsourcing Strategy Management• Determining the outsourcing strategy and setting organisational objectives or goals for outsourcing• Address issues such as will the organisation be outsourcing; how to structure the outsourcing; and what kind of outsourcing strategy to follow in terms of single source, best source, alliance, or other forms of outsourcing agreements April 3, 2011 218

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 April 3, 2011 219

Ongoing Phase - Relationship Management• Establishing and managing long-term relations with the service providers and developing relationships with service providers• Managing long term relations with the service providers• Managing agreements, managing expectations and managing issues and managing operations April 3, 2011 220

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 April 3, 2011 221

Ongoing Phase - Organisational ChangeManagement• Change management process to guide the client’s adoption of new systems (organisational and technological) and new ways of achieving business objectives through outsourcing• Ensuring readiness for change and involving relevant sponsors and stakeholders• Preparing for the change management process to guide the client organisation’s adoption of the new systems (the organisational and technological changes), defining the proper strategy for managing change, developing a team of change management leaders, identifying and employing long term change management practices and engaging employees and service providers• Re-engineering the organisation and business processes and workflows to fit the new structure• Developing and executing the communication strategies and plans, both internal and external, is very critical for the entire organisational change process• Managing the human aspects of change• Managing ongoing change and overcoming resistance to change and implementing methodologies to ensure effective and successful overall management of the organisational change April 3, 2011 222

Ongoing Phase - People Management• Providing and managing skilled resources and the necessary environment for the organisation’s outsourcing activities• Clearly defining and communicating outsourcing roles and responsibilities to personnel• Identifying workforce and personnel competency needs and developing (i.e., training) or acquiring personnel with the necessary competencies to perform the organisation’s outsourcing activities April 3, 2011 223

Ongoing Phase - Knowledge Management• Managing information and knowledge systems so that personnel have easy access to the knowledge needed to effectively perform their work• Ensuring that outsourcing information is appropriately made available and providing the information needed by personnel in a knowledge system that allows controlled, but efficient, access• Maintaining information and lessons learned to improve current and future outsourcing performance• Understanding the market and screening the potential set of service providers and assisting them in understanding the organisation’s needs April 3, 2011 224

Ongoing Phase - Technology Management• Monitoring and managing the technology infrastructure• Managing the change of the technology base and ensuring that technology strategy and architecture are managed consistent with business needs.• Managing technology assets and the licensing of technology April 3, 2011 225

Ongoing Phase - Threat Management• Identifying and actively managing threats to the client organisation’s ability to meet its business and outsourcing objectives and requirements• Managing outsourcing risks, consistent with the organisation’s existing risk management policies, by identifying, assessing and controlling risks• Managing security, privacy, confidentiality and intellectual property threats• Ensuring business continuity, including concerns regarding recovery from disasters• Monitoring statutes and regulations to ensure compliance April 3, 2011 226

1 Outsourcing Opportunity Analysis - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 227

1 Outsourcing Opportunity Analysis - 1.1 DefineCurrent State• Scope − Document the current organisational structure and process model − A solid understanding of the current state of the organisation can serve as a basis for defining the services, their performance and service levels, requirements and business case for potential outsourcing actions − Not establishing a baseline understanding of current processes can lead to ill- informed outsourcing decisions and greater risk in achieving the planned objectives for outsourcing actions• Activities − Provide support for creating and maintaining the work products and tasks for documenting the current organisational structure and process model − Document and implement the work products and tasks required for documenting the current organisational structure and process model − Support the implementation of documenting the current organisational structure and process model April 3, 2011 228

1 Outsourcing Opportunity Analysis - 1.2Outsourcing Criteria• Scope − Define the relevant criteria for identifying outsourcing opportunities − Criteria should align with the organisational outsourcing strategy and objectives so that the client’s resources are focused on the opportunities most likely to meet the organisation’s outsourcing objectives, such as to source functions that produce the highest cost savings return at the lowest cost and risk• Activities − Provide support for creating and maintaining the work products and tasks for defining the relevant criteria for identifying outsourcing opportunities − Document and implement the work products and tasks required for defining the relevant criteria for identifying outsourcing opportunities − Support the implementation of defining the relevant criteria for identifying outsourcing opportunities April 3, 2011 229

1 Outsourcing Opportunity Analysis - 1.3 DemandIdentification• Scope − Identify potential outsourcing opportunities − Focus on those opportunities most likely to meet the organisation’s outsourcing objectives, while also meeting the defined criteria, which will lead to further analysis of whether these potential opportunities should be pursued − Without taking a disciplined approach to this decision-making, the organisation risks selecting less than optimum outsourcing opportunities, or more risky outsourcing opportunities• Activities − Provide support for creating and maintaining the work products and tasks for identifying potential outsourcing opportunities − Document and implement the work products and tasks required for identifying potential outsourcing opportunities − Support the implementation of identifying potential outsourcing opportunities April 3, 2011 230

1 Outsourcing Opportunity Analysis - 1.4Outsourcing 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 April 3, 2011 231

2 Outsourcing Approach - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 232

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 April 3, 2011 233

2 Outsourcing Approach - 2.2 Business Case• Scope − Establish and implement procedures to develop and validate the business case for outsourcing − Quantitative and qualitative measures help determine the full effect of the proposed outsourcing action − Business case should be based on accurate data − Preliminary estimate of potential costs should not overlook the “extra” costs, such as potential knowledge transfer and governance and coordination costs for managing the service providers and their relationships − Business case enables decision makers to assess the full costs, benefits and risks of the potential outsourcing opportunity• Activities − Provide support for creating and maintaining the procedures for developing and validating the business case for outsourcing − Document and implement the procedures required for developing and validating the business case for outsourcing − Support the implementation of developing and validating the business case for outsourcing April 3, 2011 234

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 April 3, 2011 235

2 Outsourcing Approach - 2.4 Impact and RiskAnalysis• Scope − Perform impact and risk analyses of the proposed outsourcing action − Identify, organise and prioritise risks of the proposed outsourcing action − Provides the foundation for proactive risk management throughout the life of the outsourcing initiative − Risk analysis increases confidence in ability to manage risk and ability to ensure an appropriate level of service delivery despite the occurrence of problems• Activities − Provide support for creating and maintaining the work products and tasks for performing impact and risk analyses of the proposed outsourcing action − Document and implement the work products and tasks required for performing impact and risk analyses of the proposed outsourcing action − Support the implementation of performing impact and risk analyses of the proposed outsourcing action April 3, 2011 236

2 Outsourcing Approach - 2.5 Outsourcing InitiationDecision• 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 April 3, 2011 237

3 Outsourcing Planning - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 238

3 Outsourcing Planning - 3.1 Establish OutsourcingProject• Scope − Establish and implement plans for managing the outsourcing project for each outsourcing action − Failure to provide appropriate and sufficient, governance of outsourcing activities can cause innumerable difficulties by not having sufficient resources to perform the necessary outsourcing management activities• Activities − Provide support for creating and maintaining the work products and tasks for establishing and implementing the plans for managing outsourcing project for each outsourcing action − Document and implement the work products and tasks required for establishing and implementing the plans for managing the outsourcing project for each outsourcing action − Support the implementation of establishing and implementing the plan for managing the outsourcing project for each outsourcing action April 3, 2011 239

3 Outsourcing Planning - 3.2 Service Definition• Scope − Define and document the services and service conditions − Important that the client organisation set out in specific and measurable terms the services required, how they are to be delivered and the duration that they are required for, as well as the performance standards (service levels) that relate to each of the services to be provided − Clearly document the scope of the service to be performed in service specifications or service catalogs, clearly specifying the desired results and defining the industry standards to be followed − Defining detailed performance measures allow the client organisation to document the business requirements and rules, service levels and metrics to clarify customer expectations regarding the nature of the relationship, the levels of service to be delivered, the price and how performance will be measured, monitored and reported• Activities − Provide support for creating and maintaining the work products and tasks for defining and documenting the services and service conditions − Document and implement the work products and tasks required for defining and documenting the services and service conditions − Support the implementation of defining and documenting the services and service conditions April 3, 2011 240

3 Outsourcing Planning - 3.3 Service ProviderSelection Procedures• Scope − Establish and implement procedures to select service providers − Establish detailed procedures that require service providers to answer specific requests in a way that allows the client to compare responses and correlate data − The greater the importance of the potential outsourcing activity, the more attention should be given to the service provider selection procedures• Activities − Provide support for creating and maintaining the procedures for selecting potential service providers − Document and implement the procedures required for selecting potential service providers − Support the implementation of selecting potential service providers April 3, 2011 241

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 April 3, 2011 242

3 Outsourcing Planning - 3.5 Prepare ServiceRequirements• 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 April 3, 2011 243

4 Service Provider Evaluation - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 244

4 Service Provider Evaluation - 4.1 CommunicateRequirements• 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 April 3, 2011 245

4 Service Provider Evaluation - 4.2 Evaluate PotentialService Providers• Scope − Evaluate potential service providers using documented criteria and selection procedures − Many aspects, including the strategic alignment, reputation, references, experience, financial goals, risk, resource capabilities and information security should be considered while choosing the service provider• Activities − Provide support for creating and maintaining the work products and tasks for evaluating potential service providers according to the documented selection procedures − Document and implement the work products and tasks required for evaluating potential service providers according to the documented selection procedures − Support the implementation of evaluating potential service providers April 3, 2011 246

4 Service Provider Evaluation - 4.3 Select CandidateService 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 April 3, 2011 247

5 Outsourcing Agreements - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 248

5 Outsourcing Agreements - 5.1 NegotiationsGuidelines• Scope − Establish and implement guidelines for negotiations with service providers − Having these guidelines provides a structured approach to negotiation and can improve the internal stakeholder’s confidence in the outsourcing organisation − Guidelines also help protect the client organisation from legal or performance issues by verifying that the necessary aspects of negotiations are covered• Activities − Provide support for creating and maintaining the guidelines for negotiations with service providers − Document and implement the guidelines required for negotiations with service providers − Support the implementation of negotiations with service providers April 3, 2011 249

5 Outsourcing Agreements - 5.2 Confirm ExistingConditions• Scope − Establish and implement guidelines to confirm existing conditions − Helps mitigate risk by verifying that the service provider is making its commitments based on a clear understanding of the client organisation’s current service delivery environment• Activities − Provide support for creating and maintaining the guidelines for confirming existing conditions − Document and implement the guidelines for confirming existing conditions − Support the implementation of confirming existing conditions April 3, 2011 250

5 Outsourcing Agreements - 5.3 Negotiations• Scope − Plan and track negotiations with service providers − Identify and monitor the key topics that require consensus and capture in the formal agreement between the parties − Planning for the negotiation and clearly identifying the key topics reflects a degree of preparation that enhances internal client trust in the capabilities of the organisation, which aids in establishing positive relationships − Outsourcing organisations should be particularly wary of security and intellectual property concerns during negotiations• Activities − Provide support for creating and maintaining the work products and tasks for planning and tracking negotiations − Document and implement the work products and tasks required for planning and tracking negotiations − Support the implementation of planning and tracking negotiations April 3, 2011 251

5 Outsourcing Agreements - 5.4 Agreement Roles• Scope − Define the roles and responsibilities of the client organisation and the service provider under the proposed agreement − Having clearly defined and understood roles and responsibilities helps to guard against mismatched expectations that may result in service delivery issues• Activities − Provide support for creating and maintaining the work products and tasks for defining the roles and responsibilities of the client organisation and the service provider under the proposed agreement − Document and implement the work products and tasks required for defining the roles and responsibilities of the client organisation and the service provider under the proposed agreement − Support the implementation of defining the roles and responsibilities of the client organisation and the service provider under the proposed agreement April 3, 2011 252

5 Outsourcing Agreements - 5.5 Define SLAs andMeasures• 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 April 3, 2011 253

5 Outsourcing Agreements - 5.6 Create Agreements• Scope − Establish and implement procedures to create agreements − Legal agreements enable all the parties to have a clear understanding of what services will be delivered and at what level of quality − Given the long-term nature of most outsourcing engagements, implementing procedures for creating well-formed agreements and flexibility in the relationship between the client organisation and the service provider are critical to success• Activities − Provide support for creating and maintaining the procedures for creating agreements − Document and implement the procedures required for creating agreements − Support the implementation of creating agreements April 3, 2011 254

5 Outsourcing Agreements - 5.7 Amend Agreements• Scope − Establish and implement procedures to amend agreements − Given the long-term nature of most outsourcing engagements, implementing procedures for amending agreements and flexibility in the relationship between the client and the service provider are critical to success• Activities − Provide support for creating and maintaining the procedures for amending agreements − Document and implement the procedures required for amending agreements − Support the implementation of amending agreements April 3, 2011 255

6 Service Transfer - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 256

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 April 3, 2011 257

6 Service Transfer - 6.2 Verify Design• Scope − Establish and implement procedures to review and verify the outsourced service design − Removing defects early prevents problems during service deployment and enables the service provider to satisfy the client’s requirements and meet the service level commitments − Establish an in-depth and rigorous review of the service design• Activities − Provide support for creating and maintaining the procedures for reviewing and verifying the outsourced service design − Document and implement the procedures required for reviewing and verifying the outsourced service design − Support the implementation of reviewing and verifying the outsourced service design April 3, 2011 258

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 April 3, 2011 259

6 Service Transfer - 6.4 Personnel Transferred Out• Scope − Establish and implement procedures to manage the transfer of personnel to service providers• Activities − Provide support for creating and maintaining the procedures for managing the transfer of personnel to service providers − Document and implement the procedures required for managing the transfer of personnel to service providers − Support the implementation of managing the transfer of personnel to service providers April 3, 2011 260

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 April 3, 2011 261

7 Sourced Services Management - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 262

7 Sourced Services Management - 7.1 PerformOutsourcing Management• Scope − Plan and track outsourcing management for the outsourced services − Well-defined plan for governance and service management is necessary to ensure the client organisation’s success in managing and monitoring service providers − Planning and tracking are key aspects of service management for the outsourced services that occur throughout delivery• Activities − Provide support for creating and maintaining the work products and tasks for planning and tracking outsourcing management for the outsourced services − Document and implement the work products and tasks required for planning and tracking outsourcing management for the outsourced services − Support the implementation of planning and tracking outsourcing management plans for the outsourced services April 3, 2011 263

7 Sourced Services Management - 7.2 PerformanceMonitoring• Scope − Establish and implement procedures to monitor and verify that service commitments are being met − Verify that the agreed upon service commitments are being met and take appropriate action which may include exercising remedies in the agreement when commitments are not met or are in jeopardy of being missed − Goal of the procedures is to optimise the cost of monitoring and conformance by generating maximum compliance with minimum cost• Activities − Provide support for creating and maintaining the procedures for monitoring and verifying service commitments − Document and implement the procedures required for monitoring and verifying service commitments − Support the implementation of monitoring and verification of service commitments April 3, 2011 264

7 Sourced Services Management - 7.3 FinancialManagement• 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 April 3, 2011 265

7 Sourced Services Management - 7.4 AgreementManagement• 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 April 3, 2011 266

7 Sourced Services Management - 7.5 Problem andIncident Monitoring• Scope − Participate in problem and incident monitoring and resolution − Monitor the service provider’s adherence to problem severity management as well as participating with the service provider in understanding and resolving problems − Establish the need for and implement a reporting process for issues raised by internal stakeholders, such as end users• Activities − Provide support for creating and maintaining the work products and tasks for participating in problem and incident monitoring and resolution − Document and implement the work products and tasks required for participating in problem and incident monitoring and resolution − Support the implementation of participation in problem and incident monitoring and resolution April 3, 2011 267

7 Sourced Services Management - 7.6 ServiceDelivery Change Management• Scope − Participate in change management activities − Manage modifications of the services in a controlled manner in order to minimise the impact on their delivery, including ensuring that retained services remain synchronised with outsourced services as service changes are implemented − Change management is focused on ensuring that all changes are assessed, approved, implemented and reviewed in a controlled manner• Activities − Provide support for creating and maintaining the work products and tasks for participating in change management activities − Document and implement the work products and tasks required for participating in change management activities − Support the implementation of participation in change management activities April 3, 2011 268

7 Sourced Services Management - 7.7 ServiceChange Management• Scope − Establish and implement procedures to manage modifications to services − Major business changes, due to growth, business mergers, acquisitions and reorganisations and changing customer requirements, can require service levels to be adjusted, redefined, or even temporarily suspended − Effective service management disciplines help ensure that the effect of changes to one area of the infrastructure or business process are identified prior to the change, that changes are planned and that back out plans are in place• Activities − Provide support for creating and maintaining the procedures for managing modifications to services − Document and implement the procedures required for managing modifications to services − Support the implementation of managing modifications to services April 3, 2011 269

7 Sourced Services Management - 7.8 ReviewService Performance• Scope − Establish and implement procedures for reconciling service performance against expectations − Manage the performance of service providers in order to help ensure that the client organisation receives the agreed-to service − Effective management includes identifying deviations in the performance of service providers and taking the appropriate corrective action to assure expected service delivery• Activities − Provide support for creating and maintaining the procedures for reconciling service performance against expectations − Document and implement the procedures required for reconciling service performance against expectations − Support the implementation of reconciling service performance against expectations April 3, 2011 270

7 Sourced Services Management - 7.9 StakeholderFeedback• 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 April 3, 2011 271

7 Sourced Services Management - 7.10 Service ValueAnalysis• 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 April 3, 2011 272

7 Sourced Services Management - 7.11 ContinuationDecision• Scope − Establish and implement procedures for making decisions about continuing the outsourced service − A procedure to reconcile provider performance against expectations as a trend over time will lead to fact-based decisions for fine tuning the services delivered and eventually for future outsourcing decisions between outsourcing options − Outsourcing decision may include continued delivery of the outsourced service with no changes, identifying necessary amendments to agreements, renewing agreements for an extended duration, or terminating the agreements that are currently in place• Activities − Provide support for creating and maintaining the procedures for making decisions about continuing the outsourced service − Document and implement the procedures required for making decisions about continuing the outsourced service − Support the implementation of making decisions about continuing the outsourced service April 3, 2011 273

8 Outsourcing Completion - Activities Outsourcing Capabilities and Skills Analysis Phase Initiation Phase Delivery Phase Completion Phase 1 Outsourcing 2 Outsourcing 3 Outsourcing 4 Service Provider 5 Outsourcing 7 Sourced Services 8 Outsourcing 6 Service TransferOpportunity Analysis Approach Planning Evaluation Agreements Management Completion 7.1 Perform 1.1 Define Current 2.1 Outsourcing 3.1 Establish 4.1 Communicate 5.1 Negotiations 8.1 Completion 6.1 Service Transition Outsourcing State Approach Outsourcing Project Requirements Guidelines Planning Management 4.2 Evaluate 1.2 Outsourcing 5.2 Confirm Existing 7.2 Performance 2.2 Business Case 3.2 Service Definition Potential Service 6.2 Verify Design 8.2 Service Continuity Criteria Conditions Monitoring Providers 8.3 Resources 1.3 Demand 2.3 Governance 3.3 Service Provider 4.3 Select Candidate 6.3 Resources 7.3 Financial 5.3 Negotiations Transfer from Service Identification Model Selection Procedures Service Providers Transferred Out Management Provider 8.4 Personnel 1.4 Outsourcing 2.4 Impact and Risk 3.4 Evaluation 6.4 Personnel 7.4 Agreement 5.4 Agreement Roles Transfer from Service Options Analysis Criteria Transferred Out Management Provider 8.5 Knowledge 2.5 Outsourcing 3.5 Prepare Service 5.5 Define SLAs and 6.5 Knowledge 7.5 Problem and Transfer from Service Initiation Decision Requirements Measures Transferred Out Incident Monitoring Provider 5.6 Create 7.6 Service Delivery Agreements Change Management 5.7 Amend 7.7 Service Change Agreements Management 7.8 Review Service Performance 7.9 Stakeholder Feedback 7.10 Service Value Analysis 7.11 Continuation Decision April 3, 2011 274

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 April 3, 2011 275

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 April 3, 2011 276

8 Outsourcing Completion - 8.3 Resources Transferfrom Service Provider• Scope − Ensure that resource transfer during completion is managed according to documented procedures − Resources to be transferred can include service-related documents, software, hardware, licenses, facilities, personnel and other assets• Activities − Provide support for creating and maintaining the work products and tasks for ensuring that resource transfer during completion is managed according to documented procedures − Document and implement the work products and tasks required for ensuring that resource transfer during completion is managed according to documented procedures − Support the implementation of resource transfer during completion April 3, 2011 277

8 Outsourcing Completion - 8.4 Personnel Transferfrom 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 April 3, 2011 278

8 Outsourcing Completion - 8.5 Knowledge Transferfrom 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 April 3, 2011 279

9 Outsourcing Strategy Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 280

9 Outsourcing Strategy Management - 9.1Outsourcing Sponsorship• Scope − Establish management sponsorship for outsourcing − Ensuring that the correct level of senior management supports and is committed to the outsourcing initiatives is critical for client organisations, as outsourcing is often en a strategic initiative that crosses functional groups within the client organisation − Sponsorship should be established at the appropriate level to have the necessary scope and strategic perspective for the outsourcing activities• Activities − Provide support for creating and maintaining the work products and tasks for establishing management sponsorship for outsourcing − Document and implement the work products and tasks required for establishing management sponsorship for outsourcing − Support the implementation of establishing management sponsorship for outsourcing April 3, 2011 281

9 Outsourcing Strategy Management - 9.2Outsourcing 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 April 3, 2011 282

9 Outsourcing Strategy Management - 9.3 PotentialOutsourcing Areas• Scope − Decide to what extent outsourcing may be relevant to the client organisation − Examine the organisation’s business strategies and plans and determine which business processes, skills or competencies are better handled by others, leaving the client to concentrate on its own core competencies• Activities − Provide support for creating and maintaining the work products and tasks for determining to what extent outsourcing may be relevant to the client organisation − Document and implement the work products and tasks required for determining to what extent outsourcing may be relevant to the client organisation − Support the implementation of determining to what extent outsourcing may be relevant to the client organisation April 3, 2011 283

9 Outsourcing Strategy Management - 9.4Outsourcing 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 April 3, 2011 284

9 Outsourcing Strategy Management - 9.5Organisational Outsourcing Strategy• Scope − Define, communicate and maintain the outsourcing strategy of the client organisation − Outsourcing strategy should clearly address the client organisation’s outsourcing objectives and be in alignment with the organisation’s business, growth and continuity strategies − Outsourcing objectives set will reflect the underlying motives for the organisation considering outsourcing as an appropriate business strategy• Activities − provide support for creating and maintaining the work products and tasks for developing and managing the outsourcing strategy of the client organisation − Document and implement the work products and tasks required for developing and managing the outsourcing strategy of the client organisation − Support the implementation of developing and managing the outsourcing strategy of the client organisation April 3, 2011 285

10 Governance Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 286

10 Governance Management - 10.1 OutsourcingPolicy• Scope − Establish and implement the organisational outsourcing policy − Provides the organisational structures, processes and mechanisms needed to manage, assess and improve the client organisation’s outsourcing initiatives and support the outsourcing strategy − Governance policy should enable effective execution of the key client outsourcing activities − Demonstrates leadership and organisational commitment and is a key factor for outsourcing success• Activities − Provide support for creating and maintaining the organisational outsourcing policy − Document and implement the organisational outsourcing policy − Support the implementation of the organisation’s outsourcing policy April 3, 2011 287

10 Governance Management - 10.2 Service ProviderManagement• 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 April 3, 2011 288

10 Governance Management - 10.3 InternalStakeholder Management• Scope − Establish and implement procedures to manage internal stakeholders − Having procedures to manage the relationships with internal stakeholders helps the outsourcing organisation ensure that outsourced services meet internal needs and respond to internal clients’ changing demands• Activities − Provide support for creating and maintaining the procedures for managing internal stakeholders − Document and implement the procedures required for managing internal stakeholders − Support the implementation of managing internal stakeholders April 3, 2011 289

10 Governance Management - 10.4 DefinedOutsourcing 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 April 3, 2011 290

10 Governance Management - 10.5 Align Strategyand 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 April 3, 2011 291

10 Governance Management - 10.6 Business ProcessIntegration• Scope − Establish and implement procedures to manage the integration of business processes with those performed by service providers − IT-enabled outsourcing requires that the client organisation’s business processes be integrated with those of the service provider − Processes must be coordinated between all the involved parties to achieve the agreed-to performance and service levels• Activities − Provide support for creating and maintaining the procedures for managing the integration of business processes with those performed by service providers − Document and implement the procedures required for managing the integration of business processes with those performed by service providers − Support the implementation of managing the integration of business processes with those performed by service providers April 3, 2011 292

10 Governance Management - 10.7 Adapt toBusiness Change• Scope − Establish and implement guidelines for reviewing and adapting to changes − Processes should be constantly reviewed and refined to ensure that all activities add value appropriately − In order to achieve the maximum benefits of outsourcing, organisations should review their agreements and rectify any issues that have emerged due to change in business needs or constraints• Activities − Provide support for creating and maintaining the guidelines for reviewing and adapting to changes − Document and implement the guidelines required for reviewing and adapting to changes − Support the implementation of reviewing and adapting to changes April 3, 2011 293

11 Relationship Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 294

11 Relationship Management - 11.1 Service ProviderInteractions• 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 April 3, 2011 295

11 Relationship Management - 11.2 Service ProviderRelationships• Scope − Establish and implement procedures to manage service provider relationships − Having effective procedures to manage service provider relationships with existing service providers helps the client organisation to communicate their changing needs and to proactively determine how to address them while also addressing the organisation’s objectives − Interface between the client organisation and its service providers is crucial to successful outcomes• Activities − Provide support for creating and maintaining the procedures for managing service provider relationships − Document and implement the procedures required for managing service provider relationships − Support the implementation of managing service provider relationships April 3, 2011 296

11 Relationship Management - 11.3 InternalRelationships• Scope − Establish and implement procedures to manage internal client relationships − Effective collection, analysis and tracking of internal client interactions enables the creation of an extensive record that can provide insight into internal client requirements and needs − Having effective relationships with internal clients helps the outsourcing organisation to understand the internal clients’ changing needs• Activities − Provide support for creating and maintaining the procedures for managing internal client relationships − Document and implement the procedures required for managing internal client relationships − Support the implementation of managing internal client relationships April 3, 2011 297

11 Relationship Management - 11.4 IssueManagement• Scope − Establish and implement procedures to manage issues and their resolution − Issue management covers identification, documentation, escalation, negotiation and dispute and conflict resolution of issues amongst the client organisation, internal stakeholders and the service provider − Effective issue management requires that negotiation and resolution techniques between the client and service provider organisations be standardised as a common repeatable issue management process• Activities − Provide support for creating and maintaining the procedures for managing issues and their resolution − Document and implement the procedures required for managing issues and their resolution − Support the implementation of managing issues and their resolution April 3, 2011 298

11 Relationship Management - 11.5 Cultural Fit• Scope − Identify cultural attributes that impact the outsourcing relationship and the outsourced services and implement actions to achieve cultural fit − Addressing cultural differences also improves stakeholder satisfaction and enables all involved personnel to work together effectively• Activities − Provide support for creating and maintaining the work products and tasks for identifying cultural attributes that impact the outsourcing relationship and the outsourced services and implementing actions to achieve cultural fit − Document and implement the work products and tasks required for identifying cultural attributes that impact the outsourcing relationship and the outsourced services and implementing actions to achieve cultural fit − Support the implementation of identifying cultural attributes that impact the outsourcing relationship and the outsourced services and implementing actions to achieve cultural fit April 3, 2011 299

11 Relationship Management - 11.6 CollaborativeRelationships• Scope − Establish and implement guidelines for developing collaborative relationships with service providers − A key to successfully managing outsourcing during long-term relationships is building trust and collaboration, which goes beyond an agreement’s legal requirements to explore new ways that clients and service providers can engage in win-win activities• Activities − Provide support for creating and maintaining the guidelines for developing collaborative relationships with service providers − Document and implement the guidelines required for developing collaborative relationships with service providers − Support the implementation of developing collaborative relationships with service providers April 3, 2011 300

11 Relationship Management - 11.7 InnovativeRelationships• Scope − Develop relationships that focus on value creation through innovation − Value creation includes identifying opportunities of greater business value for the client, including innovations such as new business arrangements or enhanced technologies and other opportunities for creating value or making improvements• Activities − Provide support for creating and maintaining the work products and tasks for developing relationships that focus on value creation through innovation − Document and implement the work products and tasks required for developing relationships that focus on value creation through innovation − Support the implementation of developing relationships that focus on value creation through innovation April 3, 2011 301

12 Value Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 302

12 Value Management - 12.1 OrganisationalOutsourcing Performance• Scope − Establish and implement procedures to review organisational outsourcing performance − Organise key performance measurements across the client organisation in order to manage and improve organisational outsourcing performance − Client organisations need to manage their outsourcing activities by identifying and utilising measures or indicators that best represent the factors that lead to improved customer, operational and financial performance• Activities − Provide support for creating and maintaining the procedures for reviewing organisational outsourcing performance across the organisation − Document and implement the procedures required for reviewing organisational outsourcing performance across the organisation − Support the implementation of reviewing organisational outsourcing performance across the organisation April 3, 2011 303

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 April 3, 2011 304

12 Value Management - 12.3 BenchmarkOutsourcing 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 April 3, 2011 305

12 Value Management - 12.4 Improve OutsourcingProcesses• Scope − Improve outsourcing-related processes based on reviews of organisational outsourcing performance − Use the knowledge gained from performance reviews in order to improve the organisation’s outsourcing performance and increase the stakeholders’ value• Activities − Provide support for creating and maintaining the work products and tasks for making improvements based on reviews of organisational outsourcing performance − Document and implement the work products and tasks required for making improvements based on reviews of organisational outsourcing performance − Support the implementation of making improvements based on reviews of organisational outsourcing performance April 3, 2011 306

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 April 3, 2011 307

12 Value Management - 12.6 Business Value andImpact• 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 April 3, 2011 308

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 April 3, 2011 309

13 Organisational Change Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 310

13 Organisational Change Management - 13.1Prepare 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 April 3, 2011 311

13 Organisational Change Management - 13.2Stakeholder 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 April 3, 2011 312

13 Organisational Change Management - 13.3Define 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 April 3, 2011 313

13 Organisational Change Management - 13.4Human 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 April 3, 2011 314

13 Organisational Change Management - 13.5Communicate 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 April 3, 2011 315

13 Organisational Change Management - 13.6Organisational Change• Scope − Manage organisational change to support outsourcing actions − New service delivery model that outsourcing brings to an organisation impacts all stakeholders - employees, users and support groups − Change management captures the impact of outsourcing on various human or “soft” dimensions of the organisation throughout a outsourcing engagement and then enables addressing these issues• Activities − Provide support for creating and maintaining the work products and tasks for managing organisational change to support outsourcing actions − Document and implement the work products and tasks required for managing organisational change to support outsourcing actions − Support the implementation of managing organisational change to support outsourcing actions April 3, 2011 316

14 People Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 317

14 People Management - 14.1 Assign OutsourcingResponsibilities• Scope − Assign roles and responsibilities to outsourcing personnel based on appropriate personnel competencies − Having qualified personnel helps to ensure that work can be performed − Personnel competency is the combination of knowledge, skills and process abilities that specific personnel in the client organisation possess• Activities − Provide support for creating and maintaining the work products and tasks for assigning roles and responsibilities to outsourcing personnel based on appropriate personnel competencies − Document and implement the work products and tasks required for assigning roles and responsibilities to outsourcing personnel based on appropriate personnel competencies − Support the implementation of assigning roles and responsibilities to outsourcing personnel based on appropriate personnel competencies April 3, 2011 318

14 People Management - 14.2 PersonnelCompetencies• 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 April 3, 2011 319

14 People Management - 14.3 OrganisationalOutsourcing 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 April 3, 2011 320

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 April 3, 2011 321

15 Knowledge Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 322

15 Knowledge Management - 15.1 Provide RequiredInformation• 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 April 3, 2011 323

15 Knowledge Management - 15.2 KnowledgeSystem• 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 April 3, 2011 324

15 Knowledge Management - 15.3 MarketInformation• 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 April 3, 2011 325

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 April 3, 2011 326

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 April 3, 2011 327

16 Technology Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 328

16 Technology Management - 16.1 AssetManagement• Scope − Ensure that technology assets are managed according to documented procedures• Activities − Provide support for creating and maintaining the work products and tasks for ensuring that technology assets are managed according to documented procedures − Document and implement the work products and tasks required for ensuring that technology assets are managed according to documented procedures − Support the implementation of ensuring that technology assets are managed according to documented procedures April 3, 2011 329

16 Technology Management - 16.2 LicenseManagement• Scope − Ensure that technology licenses are managed according to documented procedures• Activities − Provide support for creating and maintaining the work products and tasks for ensuring that technology licenses are managed according to documented procedures − Document and implement the work products and tasks required for ensuring that technology licenses are managed according to documented procedures − Support the implementation of ensuring that technology licenses are managed according to documented procedures April 3, 2011 330

16 Technology Management - 16.3 TechnologyIntegration• Scope − Establish and implement procedures to manage the client organisation’s integration of its technology infrastructure with service providers − Integration can range in scope from integrating with a single outsourcing initiative and one service provider to more complex cases of integrating with several initiatives and multiple service providers and their appropriate partners − For the integration of technology infrastructure may be identified during the process of gathering requirements of a outsourcing opportunity• Activities − Provide support for creating and maintaining the procedures for managing the client organisation’s integration of its technology infrastructure with the service providers − Document and implement the procedures required for managing the client organisation’s integration of its technology infrastructure with the service providers − Support the implementation of managing the client organisation’s integration of its technology infrastructure with the service providers April 3, 2011 331

17 Threat Management - Activities Outsourcing Capabilities and Skills Ongoing Phase Governance Competency and Environment Focused Change Focused Focused9 Outsourcing 13 Organisational 10 Governance 11 Relationship 12 Value 14 People 15 Knowledge 16 Technology 17 Threat Strategy Change Management Management Management Management Management Management ManagementManagement Management 12.1 11.1 Service 13.1 Prepare for 14.1 Assign 15.1 Provide 9.1 Outsourcing 10.1 Outsourcing Organisational 16.1 Asset 17.1 Outsourcing Provider Organisational Outsourcing Required Sponsorship Policy Outsourcing Management Risk Management Interactions Change Responsibilities Information Performance 10.2 Service 11.2 Service 17.2 9.2 Outsourcing 12.2 Capability 13.2 Stakeholder 14.2 Personnel 15.2 Knowledge 16.2 License Provider Provider Organisational Constraints Baselines Involvement Competencies System Management Management Relationships Risk Management 14.3 10.3 Internal 12.3 Benchmark 9.3 Potential 11.3 Internal 13.3 Define Future Organisational 15.3 Market 16.3 Technology 17.3 Intellectual Stakeholder Outsourcing Outsourcing Areas Relationships State Outsourcing Information Integration Property Management Processes Competency 10.4 Defined 12.4 Improve 9.4 Outsourcing 11.4 Issue 13.4 Human 15.4 Lessons 17.4 Security and Outsourcing Outsourcing 14.4 Define Roles Objectives Management Resource Changes Learned Privacy Processes Processes 9.5 Organisational 13.5 Communicate 10.5 Align Strategy 15.5 Share Outsourcing 11.5 Cultural Fit 12.5 Innovation Organisational 17.5 Compliance and Architectures Knowledge Strategy Changes 10.6 Business 13.6 11.6 Collaborative 12.6 Business 17.6 Business Process Organisational Relationships Value and Impact Continuity Integration Change 10.7 Adapt to 11.7 Innovative 12.7 Outsourcing Business Change Relationships Alignment April 3, 2011 332

17 Threat Management - 17.1 Outsourcing RiskManagement• Scope − Establish and implement procedures to identify, assess and manage outsourcing risks − Effective risk management is particularly critical in the early stages of a outsourcing initiative, where requirements are being organised and service is being designed to meet those requirements − Problems encountered here can impact the success of service delivery and associated business benefits throughout the life of the initiative.• Activities − Provide support for creating and maintaining the procedures for identifying, assessing and managing outsourcing risks − Document and implement the procedures required for identifying, assessing and managing outsourcing risks − Support the implementation of identifying, assessing and managing outsourcing risks April 3, 2011 333

17 Threat Management - 17.2 Organisational RiskManagement• Scope − Establish and implement procedures to manage risks across multiple outsourced services and service providers − Effective identification and assessment of risks enables the client organisation to take mitigating actions to lower the impact should a risk event occur − Effective risk management improves the stakeholders’ confidence in the client organisation’s ability to maintain needed services and service levels• Activities − Provide support for creating and maintaining the procedures for managing risks across multiple outsourced services and service providers − Document and implement the procedures required for managing risks across multiple outsourced services and service providers − Support the implementation of managing risks across multiple outsourced services and service providers April 3, 2011 334

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 April 3, 2011 335

17 Threat Management - 17.4 Security and Privacy• Scope − Establish and implement procedures to meet security and privacy requirements − Breakdowns, such as security breaches, can impact the client organisation’s ability to provide business continuity, thereby damaging the relationship and making the involved parties vulnerable to legal action − Effective security is essential for meeting privacy requirements and protecting intellectual property − Security requirements may come from the client organisation or statutes and regulations governing the service being delivered• Activities − Provide support for creating and maintaining the procedures for meeting security and privacy requirements − Document and implement the procedures required for meeting security and privacy requirements − Support the implementation of meeting security and privacy requirements April 3, 2011 336

17 Threat Management - 17.5 Compliance• Scope − Establish and implement procedures to comply with applicable standards and statutory and regulatory requirements − Client organisation must implement procedures to address governance, risk and compliance − Procedures ensure that they comply with standards, statutes and regulations that impact their outsourcing capability and their outsourced services in order to meet statutory, regulatory and stakeholder requirements and to avoid stakeholder dissatisfaction and legal or audit issues• Activities − Provide support for creating and maintaining the procedures for complying with applicable standards and statutory and regulatory requirements − Document and implement the procedures required for complying with applicable standards and statutory and regulatory requirements − Support the implementation of complying with applicable standards and statutory and regulatory requirements April 3, 2011 337

17 Threat Management - 17.6 Business Continuity• Scope − Establish and implement procedures to ensure business continuity of outsourced services − Prepare for possible disasters in order to minimise their impact on the client organisation’s ability to continue business activities − Preparation covers service delivery, security, the protection of intellectual property, crisis management and the safety of personnel and promotes confidence in the client organisation’s and service providers’ ability to react effectively to adverse situations• Activities − Provide support for creating and maintaining the procedures for ensuring business continuity of outsourced services − Document and implement the procedures required for ensuring business continuity of outsourced services − Support the implementation of ensuring business continuity of outsourced services April 3, 2011 338

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 April 3, 2011 339

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

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

by Alan McSweeney

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