The March 18, 2010 Webinar program featured a presentation on “Use of Balanced Scorecards and Dashboard to impact Financial Performance of Outsourcing Relationships” by Sourcing Gurus. The Webinar was hosted by International Association of Outsourcing Professionals (IAOP), a powerful association of world’s leading outsourcing customers, providers & advisors. Speakers: Mike Wind, Director, IT with Collective Brands Inc. Kapil Sanghi and Ratish Pandya, Principal Consultants with Sourcing Gurus

1. Managed Services / Relationship
Balanced Scorecard
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2. Speakers
Mike Wind
 Director, IT with Collective Brands Inc (was earlier Director, IT Applications from 2007)
 Director, Consulting Services at Hackett Group for 2 years
 Director, IT at Michaels Stores, Inc for 3 years
 Florida State University
Ratish Pandya
 MS from Penn State University, PMP Certified professional with 10+yrs or IT experience
 3.5+ years experience in leading Sourcing engagements. Focus area includes
 End to end Vendor selection (ADM/BPO)
 Transition governance
 Governance setup & sustain (VMO/PMO)
 Functional expert on VMO and Balanced Score Card
Kapil Sanghi
 B.Com, M.E.P. from IIM (A),
 10 years work experience in software industry
Specializes in leading BPO engagements
Functional expert on VMO and Balanced Score Card
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3. Systems Plus Solutions – Background
20 years of transforming global enterprises using Technology
Experience in 20+ countries, multi-lingual, multi time zone environment
Team of 300+ resources and growing
ISO Certified Processes (ISO 9001:2008)
Key practice areas:
Sourcing Advisory (services rendered under “Sourcing Gurus” brand)
Technology Solutions
Oracle E-Business Oracle E-
Business
Sourcing
Advisory
Support & Helpdesk
24/7
Technology
Helpdesk &
Solutions
Support
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4. Client - Collective Brands Inc
 Collective Brands, Inc. is a leader in bringing compelling lifestyle, fashion
Revenue and performance brands for footwear and related accessories to
consumers worldwide.
Data for 2008
$ 3.4 Bn
 Collective Brands is the operating company for Payless ShoeSource,
No of Stores Stride Rite Corporation and Collective Licensing International
4,877
 Collective Brands Inc. now ranks as the largest non-athletic footwear
company in the Western Hemisphere
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5. Overseeing Managed Services: Challenge
Challenge: “Organizations are strained to ‘Effectively Oversee Outsourcing and Managed
Services’”*
 Data and metrics provided by vendors is:
 Overwhelming
 Provides little structure and/or relationship to the organization’s goals and objectives
 Only generally focuses on the delivery status
 Lack of performance or ineffectiveness is difficult to diagnose
 Relationship governance is always underestimated and tends to be an afterthought
 Lack of governance makes vendor relationships subjective and adversarial
* 2008 Black Book of Outsourcing – State of Industry Report
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6. Overseeing Managed Services: Solution
Solution: The Balanced Scorecard approach measures and articulates the value of
Managed Services
 A framework encompassing all the elements of the relationship
 Financial, Delivery, Customer Satisfaction, and Resource Productivity
 A clear line of sight between objectives and the critical Managed Services delivery
items
 A tool for communicating status and results
 A quantitative and qualitative view of the relationship health
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7. The Balanced Scorecard for Managed Services
 A framework encompassing all elements of the relationship
Standard Balanced Managed Services
Scorecard Themes Balanced Scorecard
Financial Perspective
“If we succeed, how •Profitability
will we look to our
shareholders?” •Price
•Shareholder
Value
Customer Perspective
“To achieve our •Service
vision, what customer
needs must we •Quality
serve?”
Internal Perspective
“To satisfy our
customers and •Cycle Time
shareholders, at •Productivity
which business
processes must we •Cost
excel?”
Learning and Growth
“To excel in our •New Skills
processes, what must •Continuous
our organization
learn?” Improvement
•Intellectual
Assets
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8. The Balanced Scorecard for Managed Services
 A clear line of sight between objectives and Managed Services delivery
The Scorecard is a drill down from Themes to Objectives to Metrics
The Themes will comprise of the applicable Objectives
The Objectives will comprise of the applicable Metrics
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9. The Balanced Scorecard for Managed Services
 A tool for communicating status and results
The Measures will comprise of the applicable Metrics
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© 2010 Systems Plus Proprietary and Confidential

10. The Balanced Scorecard for Managed Services
 A quantitative and qualitative view of the relationship health
The tool provides ability to add comments and analysis at each step
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© 2010 Systems Plus Proprietary and Confidential

11. The Balanced Scorecard for Managed Services
 A quantitative and qualitative view of the relationship health
The tool provides ability to add comments and analysis at each step
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© 2010 Systems Plus Proprietary and Confidential

12. Value of the Managed Services Scorecard
Value for the Client:
 Consistent method of reporting for all providers
 A historical record, in a database, for you and your team to access
 A central repository for your team to input analysis at every
 Measures that are agreed upon with emphasis on the appropriate metrics
 Providers don’t offer reporting to capture other areas
 The ability to measure without significant increase in internal costs
(Potential) Value for the provider
 Makes the governance less subjective
 The opportunity to evaluate the maturity of the client’s internal processes
 Mechanism to report the data / status of their services
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13. Benefits of the Managed Services Scorecard
Return examples for the Client:
The client and provider can save on investing in governance effort:
 Time savings on monthly governance…soft
 As much as 50% reduction in time spend on governance material preparation
 Time re-focused on relationship management and driving value from the model
Measuring the relationship will provide hard savings re-investment opportunities:
 Value-add services from the provider…hard
 Services performed to evaluate initiatives in the strategic portfolio
 Services performed to maximize productivity and increase performance of the systems
 Maximizing On/Off-Shore Ratio, Blended-Rate…hard
 Improvements in contract types…hard
 Maximize the amount of capacity and services in a multi-year core contract
 Minimize the amount of Capacity Leakage / non-utilized hours in a hours-based contract
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14. The Balanced Scorecard for Managed Services
Software-as-a-Service (Saas) Offering
 Sharepoint / .Net tool
 Hosted site with client domain (“sourcinggurus.<clientname>.com”)
 Includes pre-linked Themes, Objectives, Measures
 Includes resources to load data at regular / defined rhythms
 Includes a yearly setup (weights, tolerances, and objectives)
Additional Offerings / Services
 Resource time for metric analysis
 More frequent updates of weights, tolerances, and objectives (quarterly, semi-annually)
 Additional “tracking” metrics and linked metrics
 Process maturity analysis based on ITIL
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15. Appendix
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16. Appendix - What Comprises Scorecard
Categorized Into
Organization’s Goals Themes
• Aggregate Spending
Financial • Targeted Spending
Impact • Return on Investment
• Qualitative Measure
Gives Visibility Client & Relationship • Quantitative Measure Stated and
Management • Governance Weighted As
To
• Project Delivery
Solution • Estimating / Managing
Performance • Innovation
• Availability
Service
• Response Time
Performance • Business Continuance
• Skill Alignment
Resource & Talent
• Resource Quality
Management • Team Development
Comprised Of
Measures Objectives
• Manage Spend on Services and initiatives to Budget Targets
Financial • Optimize Spend for Specific Technology Areas
Impact
Outcomes
• Return/Benefit Impact of Investments(e.g. savings on internal headcount)
Client & • Manage Customer Relationship (summary of qualitative measures)
Relationship • Drive quality of the Service Offering (summary of qualitative measures)
Management • Grow the Maturity of the Offerings and Relationship through Governance
• Manage Initiative Delivery to Milestone and Scope Targets
Solution • Deliver projects within estimated Capacity
Performance
• Use Competency Center to Drive Innovation
Drivers
• Manage System Availability and Performance (Up-Time Rate)
Service • Manage Resolution quality and Response (Mean Time to Resolve)
Performance
• Reduce negative Business Impact/Increase Continuance (% attained)
• Align Skills and Portfolio to Business Needs
Resource &
Talent • Drive quality of the Offering and Resources
Management • Increase Customer Business Knowledge of Team
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17. Appendix - Setting Up the Scorecard
Categorized Into
1. Goals of the CIO 2. Themes
Gives Visibility Stated and
To Weighted As
Comprised Of
Measures Objectives
1. Goals of the CIO 2. Themes
CIO (IT) Objectives
• Aggregate Spending
Financial • Targeted Spending
The CIO’s Impact • Return on Investment
Corporate
Objectives can be Categorize
Client & • Qualitative Measure
utilized Relationship • Quantitative Measure
Management • Governance
(and/or) Solution
• Project Delivery
• Estimating / Managing
Performance • Innovation
Survey Answers
• Availability
A series of Service
• Response Time
Performance
interviews will be • Business Continuance
used to determine Extract
other goals of the Resource & • Skill Alignment
IT organization Talent • Resource Quality
Management • Team Development
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18. Appendix - Setting Up the Scorecard
Categorized Into
1. Goals of the CIO 2. Themes
Gives Visibility Stated and
To Weighted As
Comprised Of
4. Measures 3. Objectives / Weights
3. Objectives 3. Weightings 4. Measures
Example Only
• Manage Spend on Services and initiatives to Sr. No Theme Name Weightage
Budget Targets 1 Finance
Financial
• Optimize Spend for Specific Technology Areas
Impact 2 Customer
• Return/Benefit Impact of Investments(e.g. savings
Outcomes
on internal headcount) 3 Solution
4 Service
• Manage Customer Relationship (summary of
qualitative measures)
Weightings 5 Resource
Client &
• Drive quality of the Service Offering (summary of
Relationship
Management qualitative measures) Total 0%
• Grow the Maturity of the Offerings and
Relationship through Governance
• Manage Initiative Delivery to Milestone and Scope
Solution Targets
Performance • Deliver projects within estimated Capacity
• Use Competency Center to Drive Innovation
Drivers
• Manage System Availability and Performance
(Up-Time Rate)
Service • Manage Resolution quality and Response (Mean
Performance Time to Resolve)
• Reduce negative Business Impact/Increase
Continuance (% attained) Measures
• Align Skills and Portfolio to Business Needs
Resource & • Drive quality of the Offering and Resources
Talent
• Increase Customer Business Knowledge of
Management
Team
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19. Appendix – Using the Scorecard
Financial Data
• Budget
Financial
• Actual Analysis
System • Forecast •Entered on regular rhythms (M, Q, Y)
•Entered by off-shore team
•Updated / Approved by VMO
Support Delivery
Ticket • Number
• Delivery
Tracking
• Resolution
System
Customer Data
Customer • C-Sat Scores Manually Load
• Value-Add Services Data into Tool
Survey Tool(s)
• Governance Participation (M, Q, Y)
Project Delivery
• Schedule
PMO Tool • Milestones
• Deliverables
Setup
•Occurs at start of engagement
•Includes objectives, weights,
Financial Data
Resource • Hours measures, and tolerances
Tracking Tool • Skill / Rate Card •Can be at regular intervals (Q, Y)
• Attrition / Turnover
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20. For any queries contact us at : ask.gurus@sourcinggurus.com
India Head Office: US Office: UK Office:
Systems Plus Solutions Systems Plus Solutions USA LLC Systems Plus Solutions (UK) Ltd.
Hiranandani House, Suite 1-A, Soane Point,
Saraswat Lane, 9,Glenmere PI. 6-8 Market Place,.
Santacruz (W), Old Bridge, Reading RG1 2EG,
Mumbai – 400054, India NJ 08857, USA Berkshire, UK.
Tel: +91 22 6159 1100 Tel: +1 732 414 8943 Tel: +44 118 925 5465
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