IT Sourcing

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Best Practice Approach for Successful IT Sourcing

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IT Sourcing

  1. 1. © Copyright LEXTA GmbH 2013Dieser Bericht ist ausschließlich für Mitarbeiter des Klienten bestimmt. Die Verteilung, Zitierung und Vervielfältigung – auch auszugsweise – zum Zwecke der Weitergabe anDritte ist nur mit vorheriger schriftlicher Zustimmung der LEXTA GmbH gestattet.Die hier zusammengefassten Texte und Grafiken wurden von der LEXTA GmbH im Rahmen einer Präsentation eingesetzt; sie stellen keine vollständige Dokumentation derVeranstaltung dar.Competence in IT ManagementIT SourcingBerlin, May 2013
  2. 2. The Four Objectives Of SourcingOptimising IT costsProfessionalise IT servicesImplementing an IT strategyOptimising IT resourcesCompany-Profile-LEXTA-MAS.pptxSlide 1Source: LEXTABenchmark IT costsBudget IT costs transparentlyEconomies of scalesReduce factor cost, liability, risks
  3. 3. The Four Objectives Of SourcingOptimising IT costsProfessionalise IT servicesImplementing an IT strategyOptimising IT resourcesCompany-Profile-LEXTA-MAS.pptxSlide 2Source: LEXTACreate a transparent service spectrumOptimise service qualityIncrease flexibilityReduce technological risksOptimise time-to-market
  4. 4. The Four Objectives Of SourcingOptimising IT costsProfessionalise IT servicesImplementing an IT strategyOptimising IT resourcesCompany-Profile-LEXTA-MAS.pptxSlide 3Source: LEXTAConcentrate on core competenciesIncrease standardising / automatisationIncrease IT value for overall business
  5. 5. The Four Objectives Of SourcingOptimising IT costsProfessionalise IT servicesImplementing an IT strategyOptimising IT resourcesCompany-Profile-LEXTA-MAS.pptxSlide 4Source: LEXTAAlign task profiles with employee skillsAvoid bottlenecksProfit from external know-how
  6. 6. Five Phases for IT Sourcing ProjectsCompany-Profile-LEXTA-MAS.pptxSlide 5Source: LEXTA5. Transition4. Negotiations3. Tender2. SourcingStrategy1. StrategicMonitoring• Evaluation of currentservice provision Requirements Use of services Pricing Know-how• Processes• Indicativebenchmark• Analysis of themarket andcompetitionenvironment• Analysis of demandand capacities• Determination ofsourcing objectives• Alignment with corebusiness• Grouping of ITservices• Control of individualareas• Derivation ofsourcing scenarios• Economiccalculation /Business Case• SWOT Analysis• Tender strategy• Evaluation ofmarket options• Regulation ofSLAs and servicedocuments• Request forInformation (RFI)• Long list• Request forProposal (RFP)• Shortlist• Exploratory talks• Due Diligence• Analysis ofreferences• Conduction ofnegotiations• Development ofcontract structureand pricing model• Letter of Intent (LOI)• Ad-hoc benchmarks• Drafting offramework contract• Assistance intransfer of business• Support formigration andtransformationprocess• Definition ofapplications /services in SLAs• Supervision oftransfer ofknowledge• Partner cost control• Introduction of KPI-based monitoringand reporting• Introduction of asset,licence, contract andservice levelmanagement
  7. 7. Sourcing Happens HereCompany-Profile-LEXTA-MAS.pptxSlide 6Source: LEXTAServicelevelProcesslevelBusinessprocessesApplicationsPlatformsInfrastructureFacilitiesManagementImplementationOperationSupportPointSourcingServiceSourcingProcessSourcing
  8. 8. Sourcing Options for All ServicesCompany-Profile-LEXTA-MAS.pptxSlide 7Source: LEXTA6.Support Services5.User Help Desk4.Systems Operation3.Cross-over services2.Server platform1.Client hardware and softwareplatforms Layer 6: Service provider or own operationaccording to region / country Layer 5: Service provider per language Layer 4: Service provider or own operation /country Layer 3: All services centrally-controlled,internally delivered (internal competition of theIT locations / Follow-the-Sun) Layer 2: A hardware manufacturer, threeoperating systems, six templates for Windows,three templates for Linux Layer 1: A hardware manufacturer, oneoperating system, three devices, one image perdeviceEXAMPLE
  9. 9. Best Practice IT SourcingCompany-Profile-LEXTA-MAS.pptxSlide 8Source: LEXTABase (Layer 1 - 3)Complete serviceprovided byIT supplierBase (Layer 1 - 3)Services through IT supplierServices through own personnelServices through local providerExample of a local costs optimisation (outsourcing vs. outtasking)Optimisationof the local costsCostsbenchmarkEXAMPLE
  10. 10. Tendering and Negotiation ProcessesCompany-Profile-LEXTA-MAS.pptxSlide 9Source: LEXTARequest for Information(Optional)Request for ProposalLetter of IntentScoringShort ListDue DiligenceNegotiated offersKnock-outSourcing contractLong List
  11. 11. Evaluation and Decision MatrixCompany-Profile-LEXTA-MAS.pptxSlide 10Source: LEXTAAssessment factors Weighting /reference**Bidder 1 Bidder 2 Bidder 3 Bidder 4 Bidder 5 Bidder 6 Bidder 8 Own ITQualitative* Impression 16 % 90 % 80 % 75 % 75 % 90 % 65 % 85 % 75 %Performance 14 % 60 % 75 % 80 % 90 % 85 % 75 % 80 % 85 %Technical Perspective26 % 80 % 85 % 90 % 75 % 90 % 95 % 80 % 60 %True to RfP 18 % 65 % 60 % 70 % 70 % 75 % 85 % 90 % 80 %Price model 26 % 70 % 55 % 75 % 80 % 75 % 75 % 90 % 75 %Weighted result100 % 74 % 71 % 79 % 78 % 83 % 80 % 85 % 73 %Quantitative Prices 36 months 36 3,000,000 EUR 2,500,000 EUR 3,250,000 EUR 2,750,000 EUR 3,500,000 EUR 2,800,000 EUR 3,000,000 EUR 2,750,000 EURProject andone-off costs1 50,000 EUR 75,000 EUR 25,000 EUR 70,000 EUR 25,000 EUR 50,000 EUR 30,000 EUR 10,000 EURHourly rates 100 90 EUR 100 EUR 80 EUR 75 EUR 95 EUR 100 EUR 85 EUR 90 EURResult /36 months3,266,000 EUR 2,815,000 EUR 3,467,000 EUR 3,000,000 EUR 3,753,000 EUR 3,090,000 EUR 3,234,000 EUR 2,976,000 EURQuantitative / Qualitative**: 4.4 4.0 4.4 3.9 4.5 3.8 3.8 4.1* Summary of a comprehensive criteria catalogue** Emphasis to be agreed individually*** Smallest value = best cost-performance valueEXAMPLE
  12. 12. Transition PhaseCompany-Profile-LEXTA-MAS.pptxSlide 11Source: LEXTA• Definition ofservices in SLAs• Service levelmanagement• Quality controlServices• Validation ofcosts / prices• Development ofcost allocationmodelsFinance• Implementationof controlstructures• Development ofcontractmanagement,e. g., asset andlicencemanagementContracts• Establishing agovernance• Communication• Escalationmanagement• Control ofknowledgetransferSupplier• Support of the transfer of operations• Outsourcing of services to the IT service provider• Support of migration and transformation projects• Introduction of figure-based monitoring und reporting• Building ‘client competence’
  13. 13. IT Provider Management – ITILCompany-Profile-LEXTA-MAS.pptxSlide 12Source: LEXTAServiceStrategyServiceDesignServiceTransitionServiceOperationChangemanagementService validationand testingKnowledgemanagementApplications developmentand customisingService asset andconfiguration managementTransition planningand supportRelease anddeploymentmanagementAccessmanagementIT operationsmanagementRequestfulfilmentEventmanagementIncidentmanagementProblemmanagementIT facilitymanagementFinancialmanagementService portfoliomanagementIT securitymanagementIT architecturemanagementCompliancemanagementSuppliermanagementAvailabilitymanagementCataloguemanagementIT service continuitymanagementCapacitymanagementService levelmanagementRiskmanagementContinual-Service-ImprovementTasks and targets (ITIL)• Service Design (SD)IT suppliers support the requirements ofthe business and fulfill their contractualobligations• Continual Service Improvement (CSI)- CSI manager- Process architect- Process owner
  14. 14. Continuous ITsuppliercontrolImplementation of contractmanagementImplementationof steeringmethodsPriorisation ofIT suppliersDefinition ofObjectivesAnalysis of theoutset positionIntroduction of IT Provider ManagementCompany-Profile-LEXTA-MAS.pptxSlide 13Source: LEXTA• Kick-off• Definition ofcontacts• Assessment ofthe currentsituation• Methods and toolsevaluation• Assessment ofextent of work,quantitystructures, servicelevels, contracts,prices• Acceptance ofcompany-specificframeworkconditions• Schedule• Annual turnover ofthe supplier isassessed• Risk analysis ofthe supplier usingknown methods• Evaluation of allIT suppliers interms of turnoverand risk withidentification ofthe strategic ITsuppliers• Design of theregulation methodas a function ofthe classification• Introduction ofstandardizedreporting• Attendance atservice-reviewmeeting• Design of thenecessarysupplierinformation• Relevantinformation fromcontracts isavailable• Identification andinitialisation ofmeasures• Standardisation ofcontracts• Standardisation oftenders
  15. 15. Company-Profile-LEXTA-MAS.pptxSlide 14Source: LEXTAPlease note that this document is shortened and only shows a fraction of LEXTA’scompetencies in IT sourcing.For a full set of slides on IT sourcing and additional insights to other areas of IT management,please get in touch with us.ITBenchmarkingITGovernanceIT SecurityIT ServiceCatalogueIT KeyPerformanceIndicatorsIT SourcingIT CostOptimizationIT StrategyProjectManagementMatthias Seidlseidl@lexta.com+49 30 887124-122LEXTA GmbHDorotheenstrasse 3710117 BerlinGermanyhttp://www.lexta.com

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