Structured Approach to Implementing and Operating Outsourcing and Managed Services for Suppliers and Outsourcing Organisations
1. Structured Approach to
Implementing and Operating
Outsourcing and Managed
Services for Suppliers and
Outsourcing Organisations
Alan McSweeney
2. April 3, 2011 2
Objectives
• Describe at a high-level a structured approach to
implementing outsourcing/managed services from both
service provider and end-user organisation
3. April 3, 2011 3
Scope
• Provide a high-level view of a common set of processes to
be used by service providers and end-user organisations to
implement and operate an outsourcing/managed services
arrangement
4. April 3, 2011 4
Topics
• Introduction
− Overview
− Risks and Lessons Learned
− Principles of Outsourcing and Core Competencies
− Phases of Outsourcing Relationship
• Outsourcing for Service Providers
− Phases of Outsourcing Relationship
− Key Issues For Successful Outsourcing
− Key Capabilities and Constituent Practices
• Outsourcing for End-User Organisations
− Outsourcing Challenges
− Key Issues For Successful Outsourcing
− Key Capabilities and Constituent Practices
5. April 3, 2011 5
What is Outsourcing?
• Outsourcing is delegating the responsibility for performing
an information technology or business function to a third
party
• You outsource because the outsourcing supplier will do:
− What the organisation currently does
− At the same or better level of performance
− For the same or lower price
6. April 3, 2011 6
Potential Advantages of Managed Services
• Better Use of Staff: allows agencies to focus human
resources on strategic planning and core mission support
• Cost Savings: choose not to build and support IT and
network infrastructure available in the commercial sector;
use limited capital to purchase needed service levels and
reduce total cost of ownership
• Ability to Use Optimal Technologies: adjust types and mix
of hardware, software, skilled labour, capital investment
and technology to support changes in mission needs
• Rapid Response to Organisation and Business Changes:
supplier is measured by ability to produce solutions
7. April 3, 2011 7
Types of Outsourcing Arrangement
• Efficiency/Utility (Make it Cheaper) arrangement outsourcing
focuses primarily on cost control and, over time, cost reduction, with
the goal of maintaining consistency in the delivery of services
• Business Enhancement (Make it Better) arrangement is about
business productivity. The organisation’s performance, as compared
with their competitors, will improve, resulting in movement toward
defined business goals
• Transformational (Make me Money) arrangement is characterised
by a partnership between the service provider and service recipient
that is focused on innovation and new business, changing the very
basis on which an organisation competes
8. April 3, 2011 8
Benefits of Managed Services
• Managed Services offers an alternative approach for a client to acquire IT or telecom
support services
− Managed services solutions are designed and delivered by service providers according to a
predefined statement of deliverables and generally includes end-to-end service, service level
agreements, and assets (if desired)
• A managed service typically includes monthly recurring service-based pricing offering a
more predictable cost approach for the client
• Ongoing visibility of operational performance is provided and managed through pre-agreed
performance parameters (known as service-level agreements)
− The client may include their unique performance requirements such as degree of control and
visibility, security, availability, capacity, service continuity and other requirements as it relates to
the specific service
• Because this is a core competency, the service provider is able to optimise the best balance
of facilities, processes, resources, tools, and metrics, resulting in the best overall value for
the client
− Cost effectiveness is typically achieved through instituting process standards and establishing and
supporting a standard operating environment (SOE) consisting of COTS (Commercial Off the Shelf)
services and solutions
• Managed services can be delivered either in a BOCO (Business-owned, contractor-
operated) or COCO (contractor-owned, contractor-operated) model and is largely based on
client preference
9. April 3, 2011 9
Outsourcing Organisations - Developing a Vision for
IT Services is Required
• What do we do today?
• What do our customers want us to do?
• What changes do we need to make to align with our
customers needs?
• How will they pay for those services?
• How will we deliver those services consistently and
measure their delivery?
• What kind of organisation (Governance/Contract
Management/Structures/Staff/Skills/Service Providers) will
we need to achieve it?
• What service management processes we should use?
10. April 3, 2011 10
Reasons Organisations Outsource
17%
16%
12%
12%
8%
6%
6%
4%
3%
3%
Reduce And Control Operating
Costs
Improve Company Focus
Gain Access To World-Class
Capabilities
Free Resources For Other
Purposes
Resources Not Available
Internally
Reduce Time To Market
Take Advantage Of
Capabilities
Accelerate Reengineering
Benefits
Share Risks
Function Difficult To Manage
Or Out Of Control
11. April 3, 2011 11
Outsourcing Experiences
• 13% to 25% of outsourcing contracts are brought in-house
within the first two years
• Buyers replace 80% of their service contractors in the first
three years
• Contractors turn over 40% of their contracts each year, on
average
• Nearly 70% outsourcing organisations feel their service
provider does adequately understand what they are
supposed to do
• Not good
12. April 3, 2011 12
Key Issues For Successful Outsourcing
• Many outsourcing relationships fail, are terminated early,
are unsatisfactory to either or both of the service provider
and the client
• Outsourcing is a business issues and should be treated as
such
• Many common issues, problems and concerns arise across
outsourcing contracts
• Learn from the issues to avoid them
13. April 3, 2011 13
Hidden Costs of Outsourcing
• Transfer of knowledge
− Processes and procedures
− Documentation
− Personal knowledge
• Quality issues and their resolution
− Inspection programmes
− Sustaining quality programmes
− Cost of rework
• Communication
− Poor customer service
− Daily operational issues
14. April 3, 2011 14
Cease's Law on the Nature of the Firm
• A firm will tend to expand until the cost of organizing an extra transaction within the firm
become equal to the costs of carrying out the same transaction on the open market
• This means when it is cheaper to buy the service externally it will generally be bought
externally
• However there is an assumption of perfect knowledge and perfectly rational use of this
knowledge to achieve the most logical solution
• In reality this perfection is rarely if ever achieved
− Other less rational factors affect the decision
• Everybody Else Is Doing It
• I Want To Do It So It Appears On My Resume
• I Like New Technology
• Vendors Keep Talking About It
• I Need One Good Idea To Stamp My Mark On The Organization
• It Will Solve All My Problems
• I Hate Dealing With IT
• I Do Not Want to Setup a Large IT Function
• Cost estimates are rarely accurate
− What we know about most projects is that they either or both overrun on costs and deliver less
than expected
− Cost overruns are generally caused by a mix of errors in the initial cost estimates and deliberate
distortions in order to cause the decision to be made
15. April 3, 2011 15
Transaction Costs
• Along with production costs, there are costs for preparing, entering into and monitoring the
execution of all kinds of contracts as well as costs for implementing allocation and tracking
measures for the contracted services
• When internal transaction costs become greater than the costs of externally sourcing the
service, the service will be obtained externally
• There are hidden costs associated with sourcing a service externally
− Selecting the wrong supplier
− Costs of writing contract
− Costs of enforcing contract
− Having a poor service contract that results in hidden cost and/or reduced service
− Overlooking personnel issues
− Loosing control over the outsourced activity
− Management, quality assurance and supervision overhead
− Implementation and termination costs
− Loss of flexibility
− Loss of integration between applications and data
− Data extraction costs
− Security framework implementation
• Transition to utility computing model requires full knowledge of costs – current and future
• Note that anything can be outsourced except the management of what is
outsourced
16. April 3, 2011 16
Outsourcing Planning
• Structured approach can form the basis for an outsourcing
implementation plan for both service providers and for
companies performing outsourcing
17. April 3, 2011 17
Sample Service Transfer Plan – Outsourcing Service
Provider
• Plan subset
• Based on activities
− 1 Service Transfer
• 1.1 Resources
Transferred In
• 1.2 Personnel
Transferred In
• 1.3 Service Continuity
18. April 3, 2011 18
Sample Service Transfer Plan – Outsourcing
Organisation
• Plan subset
• Based on activities
− 1 Outsourcing
Opportunity Analysis
• 1.1 Define Current
State
• 1.2 Outsourcing
Criteria
• 1.3 Demand
Identification
• 1.4 Outsourcing
Options
19. April 3, 2011 19
Where Outsourcing Problems Happen
• Inadequate Preparation = Problems Start Here
• Flawed Service Provider Selection = Project Failure Starts
Here
• Unclear Contract = Conflict Begins Here
• Wrong Performance Measurement = Management Failure
Starts Here
• Ineffective Ongoing Management = Service Delivery
Problems Start Here
20. April 3, 2011 20
Risks in Outsourcing – Lots of Them
Outsourcing Risks
Strategic Reputation
Compliance Operational
Termination Financial
Country Contract
Access Concentration/Systemic
21. April 3, 2011 21
Strategic Risks
• Outsourcing provider may conduct activities that are
inconsistent with the overall strategic goals of the
outsourcer
• Outsourcer fails to implement appropriate and effective
oversight of the outsourcing provider
• Outsourcer has inadequate expertise to oversee the
outsourcing provider
22. April 3, 2011 22
Reputational Risks
• Outsourcing provider delivers a poor service
• Outsourcer’s customer service does not meet expectations
in areas serviced by outsourcing provider
• Outsourcing provider practices do not comply with stated
practices of outsourcer
23. April 3, 2011 23
Compliance Risks
• Outsourcing provider does not comply with relevant laws
and regulations
• Outsourcing provider does not comply with consumer laws
• Outsourcing provider has inadequate compliance systems
and control
24. April 3, 2011 24
Operational Risks
• Outsourcing provider experiences technology failures that
impact outsourcer
• Outsourcing provider has inadequate financial capacity to
fulfil obligations and/or provide remedies in the event of
failure or breach
• Outsourcing provider experiences fraud or error
• Outsourcer experiences difficulties or high costs in
undertaking inspections
25. April 3, 2011 25
Termination Risks
• Outsourcer has no exit strategy are not in place because of
from over-reliance on one provider or the loss of relevant
in-house skills
• Ability to return services from outsourcing provider is
difficult, time-consuming or costly because of a lack of
staff or loss of intellectual capacity
26. April 3, 2011 26
Financial Risks
• Inadequate cost controls and charging mechanism leads to
unexpectedly higher costs for outsourcer
• Changes to services requested from outsourcing provider
are very expensive
27. April 3, 2011 27
Country Risks
• Outsourcer cannot enforce contract
• Incorrect selection of applicable legal jurisdiction
28. April 3, 2011 28
Access Risks
• Outsourcing arrangement negatively impacts ability to
provide accurate and timely information
• There is an additional layer of complexity in understanding
activities of the outsourcing provider
29. April 3, 2011 29
Concentration/Systemic Risks
• Concentration of services from multiple outsourcers in
small number of outsourcing providers can mean lack of
control by individual outsourcer and overall systemic risk
30. April 3, 2011 30
Lessons Learned from Outsourcing Problems
• Smoothly Transferring Services And Resources
− Common cause of failure is the ineffective management of the transfer of services and
resources to the service provider, leading to service delivery problems
− Successful service providers rigorously control the transfer of services and resources to
ensure that the new service is able to adequately deliver the service and the service
continuity is maintained.
• Maintaining Stakeholder Expectations
− Common source of failure in outsourcing engagements is a difference in expectations
between the client, the service provider and the suppliers and partners
− Identifying and managing those expectations helps to ensure a common understanding
of what is necessary for success
• Translating Implicit And Explicit Needs Into Defined Requirements With Agreed
Upon Levels Of Quality
− Frequent cause of failure in outsourcing is that the service provider does not fully
understand the needs of the client
− Successful service providers rigorously gather and analyse the stated and unstated
needs, then translate those needs into a set of documented requirements
− Successful service providers also recognise that needs change over time and establish
provisions for gathering and analysing modifications to their services
31. April 3, 2011 31
Lessons Learned from Outsourcing Problems
• Reviewing Service Design And Deployment To Ensure An Adequate
Coverage Of The Client’s Requirements
− Failure in outsourcing is caused by the service provider not fully addressing the
needs of the client
− To ensure that the service delivery will meet the client’s needs successful
engagements include rigorous reviews of the service design and deployment
activities by the clients and the service provider prior to service delivery
• Managing Client’s Security
− Managing security and controlling critical data and assets are critical to
establishing trust
− Security management includes protection of intellectual property,
confidentiality and privacy concerns
• Monitoring And Controlling Activities To Consistently Meet The
Service Delivery Commitments
− Successful service providers rigorously monitor their service delivery activities
to ensure that the client’s commitments are being met
− Actions are taken to resolve and prevent problems, thereby escalating issues
as appropriate to ensure that they are addressed in a timely basis
32. April 3, 2011 32
Lessons Learned from Outsourcing Problems
• Monitoring And Managing Client’s And End User’s Satisfaction
− Success is not always defined in terms of meeting the agreed upon commitments,
because clients and end users may be unsatisfied even when commitments are being
met
− Successful outsourcing engagements monitor the satisfaction levels of the stakeholders
to identify problems and take action
• Managing Employee Satisfaction, Motivation, And Retention
− IT-enabled outsourcing often involves challenges during transition, deployment and
service delivery
− High employee turnover jeopardises the service provider’s ability to meet its client’s
requirements and undermines their expected gains and performance levels
− Proactively monitoring and managing employee satisfaction and motivation can
improve personnel retention and effectiveness
• Managing Technological Shifts And Maintaining The Availability, Reliability,
Accessibility, And Security Of Technology
− Technology is a key component of outsourcing
− Major challenges for the service provider include keeping pace with rapid changes in
technology and effectively managing the technology infrastructure while changes are
incorporated
33. April 3, 2011 33
Principles of Outsourcing
• Need a comprehensive policy to guide the assessment of whether and how activities can be
appropriately outsourced
• Senior management needs to be responsible for outsourcing policy and related overall
responsibility for activities undertaken under the policy
• Need to establish a comprehensive outsourcing risk management programme to address
the outsourced activities and the relationship with the service provider
• Need to ensure that outsourcing arrangements does diminish its ability to fulfil obligations
to customers and stakeholders
• Need to conduct appropriate due diligence in selecting outsourcing service providers
• Outsourcing relationship needs to be governed by contract that clearly describes all
material aspects of the outsourcing arrangement, including the rights, responsibilities and
expectations of all parties
• Need to establish and maintain contingency plans, including a plan for availability and
disaster recovery and regular testing of backup arrangements
• Need to take appropriate steps to ensure that outsourcing providers protect confidential
information from intentional or inadvertent disclosure
• Need to be aware of the potential risks posed where the activities of multiple outsourcers
entities are concentrated within a small number of outsourcing providers
34. April 3, 2011 34
Core Competencies for Exploiting Outsourcing and
Managed Services for Organisations Selecting
Outsourcing
• Sourcing – having an effective approach to outsourcing
− Concerned with managing the IT function like a business
• Supplier Management – plan, analyse and manage the
ongoing relationships with suppliers
− Concerned with managing the IT function
35. April 3, 2011 35
Sourcing and Supplier Management
• Supplier Management competence and associated
processes operationalises the strategic decisions taken
within the Sourcing competence
Supplier
ManagementSourcing
36. April 3, 2011 36
Sourcing
Competence
Supplier Management CompetenceSourcing Competence
Sourcing and Supplier Management
Strategic
Sourcing
Decision
Supplier
Selection
Contracting
Governance and
Partner
Integration
Transition
Supplier
Engagement
Order
Management
(Ordering/
Delivery/
Distribution)
Supplier
Communications
Supplier Risk
Monitoring
Contract
Management
(Payment,
Penalties)
Performance
Measurement
And Monitoring
Supplier
Development
Evaluation
Procurement of IT Services and IT Hardware/Software
37. April 3, 2011 37
Sourcing Competence
Strategy
Alignment
Objectives
and Scoping
Sourcing
Model
Business Case
Calculation
Organisational
Readiness
Partner
Selection
Contracting Transition
Partner
integration
and
Governance
Reevaluation
Planning Cycle
Sourcing Cycle
38. April 3, 2011 38
Sourcing Competence
• Define sourcing strategy and sourcing model
• Evaluate outsourcing potential of IT processes
• Select optimal partner(s)
• Manage the transition to selected partner(s)
• Setting the basis for a successful relationship with selected
partner(s) to maximise business value contribution
39. April 3, 2011 39
Sourcing Competence Scope
• Strategic sourcing decisions on what processes are in- or outsourced
to what extent
• The decision on what sourcing model is applied
− Internal/external
− Onshore/nearshore/offshore
− Single vs. multiple vendor relationship
• Calculation of business cases for outsourcing projects
• The process of selecting the optimal partner(s)
• Preparation, negotiation, closing and re-evaluation of contracts with
selected partner(s)
• Managing the transition process and setting up requirements for an
enduring and successful relationship with partner(s)
40. April 3, 2011 40
Dimensions of Sourcing Competence Measurement
Framework
• Measure state of
Sourcing competence
along three dimensions
− Sourcing Strategy
− Contracting
− Sourcing Execution
• Define facets of each
dimension
• Measure each facet in
terms of:
− Associated processes and
their state of development
− Scope or extent within the
organisation
Sourcing
Strategy
Contracting
Sourcing
Execution
41. April 3, 2011 41
Supplier Management Competence
• Supplier management is concerned with the execution of
the IT supplier strategy and manages the suppliers on an
operational basis
• Supplier management operationalises the strategic
decisions of IT suppliers and contracts agreed in the
Sourcing competence
• Effective supplier management provides opportunities for
cost reduction from better control of assets and people, as
well as value-creation opportunities by supporting IT
supplier collaboration and innovation
42. April 3, 2011 42
Supplier Management Competence Scope
• All activities related to managing ongoing (operational) relationship
with suppliers and associated systems/ tools
• Analysis of existing suppliers to identify suitable ongoing
engagement strategies at an individual and portfolio level
• Manage supplier relationship in line with evolving IT strategy
• Measure and monitor supplier performance from both the
organisation’s own perspective and the supplier’s perspective
• Manage the ongoing external risks (e.g. supplier insolvency) and
ongoing internal risks (e.g. unchecked SLAs) derived from the
organisation’s relationships with its suppliers
• Long-term development of suppliers, their products and services to
help them improve internally to achieve improved levels of
innovation, quality and performance, and to be aligned optimally
with the enterprise
43. April 3, 2011 43
Dimensions of Supplier Management Competence
Measurement Framework
• Measure state of Supplier
Management
competence along three
dimensions
− Supplier Alignment
− Relationship Management
− Performance And Risk
Management
• Define facets of each
dimension
• Measure each facet in
terms of:
− Associated processes and
their state of development
− Scope or extent within the
organisation
Supplier
Alignment
Relationship
Management
Performance
And Risk
Management
44. April 3, 2011 44
Phases of Outsourcing Relationship
Ongoing
Initiation Delivery CompletionAnalysis
For outsourcing organisation
For both outsourcing organisation and service provider
45. April 3, 2011 45
Phases of Outsourcing Relationship
Management of outsourcing lifecycleManagement of outsourcing lifecycleOngoing
Close-out the service after the contract ends
or the service has been terminated
Close-out the service after the contract
ends or the service has been terminated
Completion
Provide service and manage and measure its
provision
Provide service and manage and
measure its provision
Delivery
Prepare for and transition to provision of
service
Prepare for and transition to provision
of service
Initiation
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
Analysis
Service ProviderOutsourcing OrganisationPhase
46. April 3, 2011 46
Roles of Service Provider and Outsourcing Organisation
During Phases of Outsourcing Relationship
Initiation
Delivery
Completion
Analysis
Ongoing
Service Provider Outsourcing Organisation
Determine if outsourcing represents a business
opportunity
Prepare for service transition, transfer resources and
personnel from outsourcing organisation and ensure
service continuity
Plan for outsourcing of selected services, evaluate and
select a service provider, create an outsourcing
agreement and transfer resources and personnel to
service provider
Define and agree requirements, negotiate contract,
plan, design and deploy service, implement service
delivery
Implement the capability to manage the service
provider, administer the agreement and the issues,
challenges and changes that arise after the agreement
has been reached, reviewing the service provider’s
performance
Implement knowledge management processes,
perform people management, implement
performance management, manage relationship,
manage technology and manage risks and threats
Develop outsourcing strategy management, manage
relationship with service provider, ensure value,
implement knowledge management processes,
manage technology and manage risks and threats
Prepare for service transition, transfer resources and
personnel from outsourcing organisation and ensure
service continuity
Plan for completion, ensure service continuity,
transfer resources and personnel from outsourcing
organisation and transfer knowledge
47. April 3, 2011 47
Roles of Service Provider and Outsourcing Organisation
During Phases of Outsourcing Relationship
Initiation Delivery CompletionAnalysis Ongoing
Service Provider
Outsourcing Organisation
Common
Language
and
Expectations
Agreed Roles
and
Responsibilities
48. April 3, 2011 48
Key Capabilities and Constituent Practices
• Idealised set of steps for a service provider and end-user
organisations and outsourcing organisation to perform
when taking on a new outsourcing service
• Provides a detailed checklist of work to be done
• Each practices contains a set of activities and tasks
• Can be modified to suit the circumstances: scope of
outsourcing, size of service, duration of contract
• Can forms the basis of a project plan for elements of
outsourcing work such as initiation
• Reduces risk of failure
49. April 3, 2011 49
Key Capabilities Within Outsourcing Lifecycle for
Service Providers
Ongoing
Initiation Delivery Completion
People
Management
Performance
Management
Relationship
Management
Technology
Management
Knowledge
Management
Threat
Management
Contracting
Service Design
and
Deployment
Service
Delivery
Service
Transfer
Service
Transfer
50. April 3, 2011 50
Key Capabilities Within Outsourcing Lifecycle for
End-User Organisations
Outsourcing
Strategy
Management
Governance
Management
Relationship
Management
Value
Management
Technology
Management
People
Management
Outsourcing
Planning
Outsourcing
Agreements
Sourced
Services
Management
Outsourcing
Completion
Outsourcing
Opportunity
Analysis
Ongoing
Initiation Delivery CompletionAnalysis
Knowledge
Management
Organisational
Change
Management
Threat
Management
Outsourcing
Approach
Service
Transfer
Service
Provider
Evaluation
51. April 3, 2011 51
Key Capabilities Within Outsourcing Lifecycle for
Service Providers and End-User Organisations
Outsourcing
Capabilities
and Skills
Analysis Initiation Delivery Ongoing Completion
Outsourcing
Organisation
Outsourcing
Organisation
Service
Provider
Outsourcing
Organisation
Service
Provider
Outsourcing
Organisation
Service
Provider
Outsourcing
Organisation
Service
Provider
Outsourcing
Opportunity
Analysis
Outsourcing
Approach
Service
Transfer
Service
Transfer
Contracting
Service Design
and
Deployment
Service
Delivery
Outsourcing
Completion
Sourced
Services
Management
Outsourcing
Planning
Service
Provider
Evaluation
Outsourcing
Agreements
Service
Transfer
Knowledge
Management
People
Management
Performance
Management
Relationship
Management
Technology
Management
Threat
Management
Outsourcing
Strategy
Management
Governance
Management
Relationship
Management
Value
Management
Organisational
Change
Management
People
Management
Knowledge
Management
Technology
Management
Threat
Management
52. April 3, 2011 52
Key Capabilities and Constituent Practices for
Service Providers
Outsourcing
Capabilities
and Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service
Design and
Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred
Out
1.5 Personnel
Transferred
Out
2.1
Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and
Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify
Design
3.8 Deploy
Service
4.1 Plan
Service
Delivery
4.2 Train
Clients
4.3 Deliver
Service
4.4 Verify
Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known
Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5
Engagement
Knowledge
5.6 Reuse
5.7 Version
and Change
Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2
Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilitie
s
6.5 Define
Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver
Training
6.8 Plan and
Deliver
Training
6.9
Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1
Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred
Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5
Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier
and Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2
Engagement
Risk
10.3 Risk
Across
Engagements
10.4 Security
10.5
Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
53. April 3, 2011 53
Key Capabilities and Constituent Practices for End-
User Organisations - 1 Outsourcing
Capabilities and
Skills
Analysis Phase Initiation Phase Delivery Phase
1 Outsourcing
Opportunity
Analysis
2 Outsourcing
Approach
3 Outsourcing
Planning
4 Service Provider
Evaluation
5 Outsourcing
Agreements
6 Service Transfer
Completion Phase
8 Outsourcing
Completion
7 Sourced Services
Management
1.1 Define Current
State
1.2 Outsourcing
Criteria
1.3 Demand
Identification
1.4 Outsourcing
Options
2.1 Outsourcing
Approach
2.2 Business Case
2.3 Governance
Model
2.4 Impact and
Risk Analysis
2.5 Outsourcing
Initiation Decision
3.1 Establish
Outsourcing
Project
3.2 Service
Definition
3.3 Service
Provider Selection
Procedures
3.4 Evaluation
Criteria
3.5 Prepare
Service
Requirements
4.1 Communicate
Requirements
4.2 Evaluate
Potential Service
Providers
4.3 Select
Candidate Service
Providers
5.1 Negotiations
Guidelines
5.2 Confirm
Existing Conditions
5.3 Negotiations
5.4 Agreement
Roles
5.5 Define SLAs
and Measures
5.6 Create
Agreements
5.7 Amend
Agreements
6.1 Service
Transition
6.2 Verify Design
6.3 Resources
Transferred Out
6.4 Personnel
Transferred Out
6.5 Knowledge
Transferred Out
7.1 Perform
Outsourcing
Management
7.2 Performance
Monitoring
7.3 Financial
Management
7.4 Agreement
Management
7.5 Problem and
Incident
Monitoring
7.6 Service
Delivery Change
Management
7.7 Service Change
Management
7.8 Review Service
Performance
7.9 Stakeholder
Feedback
7.10 Service Value
Analysis
7.11 Continuation
Decision
8.1 Completion
Planning
8.2 Service
Continuity
8.3 Resources
Transfer from
Service Provider
8.4 Personnel
Transfer from
Service Provider
8.5 Knowledge
Transfer from
Service Provider
54. April 3, 2011 54
Key Capabilities and Constituent Practices for End-
User Organisations - 2 Outsourcing
Capabilities and
Skills
Ongoing Phase
Governance
Focused
Competency
and Change
Focused
Environment
Focused
9 Outsourcing
Strategy
Management
10 Governance
Management
11 Relationship
Management
12 Value
Management
13
Organisational
Change
Management
14 People
Management
15 Knowledge
Management
16 Technology
Management
17 Threat
Management
9.1 Outsourcing
Sponsorship
9.2 Outsourcing
Constraints
9.3 Potential
Outsourcing
Areas
9.4 Outsourcing
Objectives
9.5
Organisational
Outsourcing
Strategy
10.1
Outsourcing
Policy
10.2 Service
Provider
Management
10.3 Internal
Stakeholder
Management
10.4 Defined
Outsourcing
Processes
10.5 Align
Strategy and
Architectures
10.6 Business
Process
Integration
10.7 Adapt to
Business Change
11.1 Service
Provider
Interactions
11.2 Service
Provider
Relationships
11.3 Internal
Relationships
11.4 Issue
Management
11.5 Cultural Fit
11.6
Collaborative
Relationships
11.7 Innovative
Relationships
12.1
Organisational
Outsourcing
Performance
12.2 Capability
Baselines
12.3 Benchmark
Outsourcing
Processes
12.4 Improve
Outsourcing
Processes
12.5 Innovation
12.6 Business
Value and
Impact
12.7
Outsourcing
Alignment
13.1 Prepare for
Organisational
Change
13.2
Stakeholder
Involvement
13.3 Define
Future State
13.4 Human
Resource
Changes
13.5
Communicate
Organisational
Changes
13.6
Organisational
Change
14.1 Assign
Outsourcing
Responsibilities
14.2 Personnel
Competencies
14.3
Organisational
Outsourcing
Competency
14.4 Define
Roles
15.1 Provide
Required
Information
15.2 Knowledge
System
15.3 Market
Information
15.4 Lessons
Learned
15.5 Share
Knowledge
16.1 Asset
Management
16.2 License
Management
16.3 Technology
Integration
17.1
Outsourcing
Risk
Management
17.2
Organisational
Risk
Management
17.3 Intellectual
Property
17.4 Security
and Privacy
17.5 Compliance
17.6 Business
Continuity
55. April 3, 2011 55
Analysis Phase
• End-User Organisation
• Concerned with analysing operations and
functions to identify those services,
processes, or functions that could
potentially be outsourced
− Understanding the current, or as-is, state of
the client organisation’s structure and
processes
− Identifying the relevant criteria for selecting
outsourcing opportunities
− Identifying outsourcing opportunities to
meet outsourcing objectives and criteria
− Organising options for outsourcing
− Developing and validating the Business Case
for each outsourcing option
− Identifying the outsourcing approach and
governance model for the proposed
outsourcing action
− Performing impact and risk analyses of the
proposed outsourcing action
− Making the decision whether or not to
source the proposed outsourcing action
56. April 3, 2011 56
Initiation Phase
• Service Provider
• Concerned with preparation for and initiation of
service delivery
− Gather requirements
− Perform due diligence to validate customer
information
− Assess if and how the requirements can be met
− Prepare for negotiation
− Negotiate and sign contract
− Confirm assumptions
− Confirm responsibilities and commitments
− Design the service
− Review the service design
− Create service specification
− Deploy the service
− Transfer resources - personnel, technology,
infrastructure, applications
− Transition of service
• End-User Organisation
• Concerned with preparation for and initiation of
managing outsourced services
− Preparing for service selection by developing the
solicitation and criteria for selection
− Soliciting and evaluating potential service
providers
− Preparing for negotiation by having an
organisational position on cost, quality and other
topics that need to be negotiated
− Defining the formal service level agreements and
service provider performance measures
− Understanding service provider’s capabilities by
gathering information about the service provider
and confirming the assumptions that impact
commitments
− Establishing a formal agreement with service
providers that clearly articulates the clients’ and
service provider’s responsibilities and
commitments
− Providing feedback on the service design in order
to ensure that the services are meeting the
client’s requirements and the agreed-upon
commitments
− Managing the effective transfer of resources
needed for service delivery, including personnel,
technology infrastructure and work environment
57. April 3, 2011 57
Delivery Phase
• Service Provider
• Concerned with service delivery including
management of service delivery, verification
that commitments are being met and
management of costs associated with the
service provision
− Planning and tracking the service delivery
activities
− Delivering services according to the agreed
commitments
− Managing the finances associated with the service
delivery
− Identifying and controlling modifications to the
services being provided
− Identifying and controlling modifications to
associated service commitments
− Identifying problems that impact the service
delivery and taking both preventive and
corrective actions
• End-User Organisation
• Concerned with monitoring the service
provider’s service delivery capabilities, including
the ongoing monitoring of service provider
performance to verify that commitments are
being met, monitoring changes, management of
the finances and agreements associated with
the service provision, fostering realistic
expectations and performing value analysis
− Planning and tracking the outsourcing
management activities
− Ensuring that services are delivered according to
the agreed-upon commitments
− Managing the finances associated with the service
delivery
− Identifying and controlling modifications to the
services being provided or to the associated
service commitments
− Facilitating problem resolution for problems that
impact the service delivery
− Reconciling performance against expectations and
ensuring that the service provision returns value
to the client organisation
58. April 3, 2011 58
Ongoing Phase
• Service Provider
• Management functions that need to
be performed during the entire
outsourcing lifecycle
− Manage and motivate personnel to
effectively deliver services
− Manage relationships with clients,
suppliers and business partners
− Measure and review the organisation’s
performance and taking action to
improve it
− Manage information and knowledge
systems so that personnel have access
to the knowledge needed to
effectively perform their work
− Identify and control threats to the
organisation’s ability to meet its
objectives and client requirements
− Manage the technology, systems and
applications infrastructure used to
support delivery of service
• End-User Organisation
• Management functions that need to
be performed during the entire
outsourcing lifecycle
− Manage and motivate personnel to
effectively deliver services
− Manage relationships with clients,
suppliers and business partners
− Measure and review the organisation’s
performance and taking action to
improve it
− Manage information and knowledge
systems so that personnel have access
to the knowledge needed to
effectively perform their work
− Identify and control threats to the
organisation’s ability to meet its
objectives and client requirements
− Manage the technology, systems and
applications infrastructure used to
support delivery of service
59. April 3, 2011 59
Completion Phase
• Service Provider
• Concerned with closing down the
engagement at the end of the outsourcing
lifecycle
− Manage the transfer of resources to the
new service provider, whether it is to the
client or to another service provider
− Ensure service continuity during transfer
− Identify and transferring the knowledge
critical for the delivery of service
• End-User Organisation
• Concerned with closing down the
engagement at the end of the outsourcing
lifecycle
− Planning for closing down a outsourced
service and managing the agreement during
the close-down period including managing
the agreement during termination
proceedings, during renewal, or during
normal completion
− Managing the transfer of resources to the
new service provider, whether it is to back
to the organisation or to another service
provider including the potential transfer of
people, technology infrastructure and
intellectual property
− Ensuring service continuity during the
transfer of responsibilities for service
provision
− Identifying and transferring the knowledge
capital critical for the delivery of service
60. April 3, 2011 60
Benefits of Structured Approach
• Service Provider
• Minimises problems
• Provides common language
• Provides common understanding of
roles and responsibilities
• Provides mechanism for resolving
issues
• Know what is expected and what
should be done
• End-User Organisation
• Provides structured approach to
evaluating and adopting outsourcing
• Demonstrates due diligence in
selecting outsourcing partner
• Provides common understanding of
roles and responsibilities
• Provides mechanism for resolving
issues
• Knows service to be provided and
measures delivery
62. April 3, 2011 62
Phases of Outsourcing Relationship
Ongoing
Initiation Delivery Completion
63. April 3, 2011 63
Phases of Outsourcing Relationship
• Every outsourcing relationship has four phases
− Initiation – prepare for and transition to provision of service
− Delivery – provide service and manage and measure its provision
− Completion – close-out the service after the contract ends or the
service has been terminated
− Ongoing – management of outsourcing lifecycle
64. April 3, 2011 64
Initiation Phase
• Concerned with preparation for and initiation of service delivery
− Gather requirements
− Perform due diligence to validate customer information
− Assess if and how the requirements can be met
− Prepare for negotiation
− Negotiate and sign contract
− Confirm assumptions
− Confirm responsibilities and commitments
− Design the service
− Review the service design
− Create service specification
− Deploy the service
− Transfer resources - personnel, technology, infrastructure, applications
− Transition of service
65. April 3, 2011 65
Delivery Phase
• Concerned with service delivery including management of
service delivery, verification that commitments are being
met and management of costs associated with the service
provision
− Planning and tracking the service delivery activities
− Delivering services according to the agreed commitments
− Managing the finances associated with the service delivery
− Identifying and controlling modifications to the services being
provided
− Identifying and controlling modifications to associated service
commitments
− Identifying problems that impact the service delivery and taking
both preventive and corrective actions
66. April 3, 2011 66
Completion Phase
• Concerned with closing down the engagement at the end
of the outsourcing lifecycle
− Manage the transfer of resources to the new service provider,
whether it is to the client or to another service provider
− Ensure service continuity during transfer
− Identify and transferring the knowledge critical for the delivery of
service
67. April 3, 2011 67
Ongoing Phase
• Management functions that need to be performed during
the entire outsourcing lifecycle
− Manage and motivate personnel to effectively deliver services
− Manage relationships with clients, suppliers and business partners
− Measure and review the organisation’s performance and taking
action to improve it
− Manage information and knowledge systems so that personnel
have access to the knowledge needed to effectively perform their
work
− Identify and control threats to the organisation’s ability to meet
its objectives and client requirements
− Manage the technology, systems and applications infrastructure
used to support delivery of service
68. April 3, 2011 68
Key Capabilities Within Outsourcing Lifecycle
Ongoing
Initiation Delivery Completion
People
Management
Performance
Management
Relationship
Management
Technology
Management
Knowledge
Management
Threat
Management
Contracting
Service Design
and
Deployment
Service
Delivery
Service
Transfer
Service
Transfer
69. April 3, 2011 69
Key Capabilities and Constituent Practices
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
70. April 3, 2011 70
Key Capabilities and Constituent Practices
• Idealised set of steps for a service provider to perform
when taking on a new outsourcing client
• Provides a detailed checklist of work to be done
• Each practice contains a set of activities and tasks
• Can be modified to suit the circumstances: scope of
outsourcing, size of client, duration of contract
• Can forms the basis of a project plan for elements of
outsourcing work such as initiation
• Reduces risk of failure
• Demonstrates professionalism to potential clients
71. April 3, 2011 71
Key Issues For Successful Outsourcing
• Many outsourcing relationships fail, are terminated early,
are unsatisfactory to either or both of the service provider
and the client
• Outsourcing is a business issues and should be treated as
such
• Many common issues, problems and concerns arise across
outsourcing contracts
• Learn from the issues to avoid them
72. April 3, 2011 72
Key Issues For Successful Outsourcing
1. Establishing and maintaining trust with stakeholders
2. Managing stakeholder expectations
3. Translating implicit and explicit needs into defined requirements with agreed-
upon levels of quality
4. Establishing well-defined contracts with stakeholders, including clients, suppliers
and partners
5. Reviewing service design and deployment to ensure adequate coverage of the
requirements
6. Ensuring the effectiveness of interactions with stakeholders
7. Managing supplier and partner relationships to ensure that commitments are
met
8. Ensuring compliance with statutory and regulatory requirements
9. Managing clients’ security
10. Managing cultural differences between stakeholders
11. Monitoring and controlling activities to consistently meet the service delivery
commitments
73. April 3, 2011 73
Key Issues For Successful Outsourcing
12. Monitoring and managing clients’ and end-users’ satisfaction
13. Building and maintaining the competencies that enable personnel to effectively
perform their roles and responsibilities
14. Managing employee satisfaction, motivation and retention
15. Establishing and maintaining an effective work environment
16. Maintaining a competitive advantage
17. Innovating, building flexibility and increasing responsiveness to meet unique
and evolving client requirements
18. Managing rapid technological shifts and maintaining the availability, reliability,
accessibility and security of technology
19. Capturing and using knowledge
20. Smoothly transferring services and resources
21. Maintaining continuity of the service delivery
22. Capturing and transferring knowledge gained to the client during contract
completion
23. Measuring and analysing the reasons for termination, to prevent reoccurrence
74. April 3, 2011 74
Issue 1 - Establishing And Maintaining Trust With
Stakeholders
• Building a trusting relationship with stakeholders is critical
to success
• Important for all suppliers and partners involved in the
outsourcing relationship – hardware, software,
communications, services
• By effectively managing expectations and responding to
personnel, clients and end-users, service provider
establishes trust with its stake- holders to help establish
long-term relationships
75. April 3, 2011 75
Issue 2 - Managing Stakeholder Expectations
• Differences in expectations between the client, the service
provider and the suppliers and partners is a common
source of failure
• Identifying and managing those expectations helps to
ensure a common understanding of what is necessary for
success
76. April 3, 2011 76
Issue 3 - Translating Implicit And Explicit Needs Into Defined
Requirements With Agreed-Upon Levels Of Quality
• Frequent cause of failure in outsourcing is that the service
provider does not fully understand the needs of the client
− Inability of clients to adequately express their needs
− Lack of rigor by the service provider in gathering and analysing
those needs
• Successful service providers rigorously gather and analyse
the stated and unstated needs
− Translate those needs into a set of documented requirements
• Successful providers also recognise that needs change over
time and establish provisions for gathering and analysing
modifications to their services
77. April 3, 2011 77
Issue 4 - Establishing Well-Defined Contracts With
Stakeholders, Including Clients, Suppliers And Partners
• Poorly written contracts are a common cause of failure
and result in a large number of contracts being
renegotiated
• Outsourcing arrangements are typically long-term in
nature and require contracts that are clear and detailed as
well as being flexible enough to account for business
changes
• Formal mechanisms are required in order for the provider
to identify changing needs, modify services based on those
changes and amend contracts to reflect the current
requirements and commitments
78. April 3, 2011 78
Issue 5 - Reviewing Service Design And Deployment
To Ensure Adequate Coverage Of The Requirements
• Failure in outsourcing can be caused by the service
provider not fully addressing the needs of the client
• To ensure that the service delivery will meet the client’s
needs, successful engagements include rigorous reviews of
the service design and deployment activities by the clients
and the service provider prior to service delivery
79. April 3, 2011 79
Issue 6 - Ensuring The Effectiveness Of Interactions
With Stakeholders
• Large-scale outsourcing often involves a combination of
face-to-face and remote interactions
• Interactions with clients need to be managed in order to
effectively understand their needs
• Clear communications with all stakeholders can have a
strong positive impact on the ability to effectively perform
work
80. April 3, 2011 80
Issue 7 - Managing Supplier And Partner
Relationships To Ensure That Commitments Are Met
• Outsourcing engagements can include multiple service
providers working together to meet the client’s needs
• Regardless of the type of relationship suppliers and
partners can have a significant impact on the effectiveness
of the service delivery and they must be actively managed
81. April 3, 2011 81
Issue 8 - Ensuring Compliance With Statutory And
Regulatory Requirements
• Service providers are often faced with the need to comply
with a large variety of laws and regulations
• Effectively operating in this environment requires rigorous
analysis and management of all applicable legal
requirements to protect themselves and their clients
82. April 3, 2011 82
Issue 9 - Managing Clients’ Security
• Managing security and controlling critical data and assets
are critical to establishing trust
• Security management includes protection of intellectual
property, confidentiality and privacy concerns
• Breakdowns, such as security breaches, can impact the
service provider’s ability to provide adequate service and
can irreparably damage the relationship with the client
83. April 3, 2011 83
Issue 10 - Managing Cultural Differences Between
Stakeholders
• In large-scale outsourcing there are many potential
cultural differences between service providers, clients,
end-users, suppliers and partners
• These include differences between country, region and
organisational culture
• These differences need to be identified and addressed in
order to guard against breakdowns in communication
84. April 3, 2011 84
Issue 11 - Monitoring And Controlling Activities To
Consistently Meet The Service Delivery Commitments
• Successful service providers monitor their service delivery
activities to ensure that the client’s commitments are
being met
• Actions are taken to resolve and prevent problems,
thereby escalating issues as appropriate to ensure that
they are addressed in a timely basis
85. April 3, 2011 85
Issue 12 - Monitoring And Managing Clients’ And
End-Users’ Satisfaction
• Success is not always defined in terms of meeting the
agreed-upon commitments because clients and end-users
may be unsatisfied even when commitments are being
met
• Successful outsourcing engagements monitor the
satisfaction levels of the stakeholders to identify problems
and take action
86. April 3, 2011 86
Issue 13 - Building And Maintaining The Competencies That
Enable Personnel To Effectively Perform Their Roles And
Responsibilities
• Outsourcing is often highly dependant on specialised
competencies without which personnel cannot effectively
perform the work assigned to them
• Service providers need to manage the competencies of
individuals as well as the workforce as a whole in order to
ensure that work is effectively performed and that the
client’s requirements are met.
87. April 3, 2011 87
Issue 14 - Managing Employee Satisfaction,
Motivation And Retention
• IT-enabled outsourcing often involves challenges during
transition and deployment and service delivery
• High employee turnover jeopardises the service provider’s
ability to meet its clients’ requirements and undermines
their expected gains and performance levels
• Proactively monitoring and managing employee
satisfaction and motivation can improve personnel
retention and effectiveness
88. April 3, 2011 88
Issue 15 - Establishing And Maintaining An Effective
Work Environment
• A work environment that is well suited to the service being
delivered enables personnel to effectively perform their
work
• Also contributes to employee satisfaction and retention
89. April 3, 2011 89
Issue 16 - Maintaining A Competitive Advantage
• Service providers need to effectively demonstrate their
capabilities relative to competitors
• Initially done to differentiate the service provider from the
competition in such a way that they will be chosen over
other providers
• Done to continually improve the organisation’s capabilities
and demonstrate to clients that the current service
provider is the organisation best equipped to meet clients’
changing needs
• Important aspect of being competitive is demonstrating
financial stability and longevity
90. April 3, 2011 90
Issue 17 - Innovating, Building Flexibility and Increasing
Responsiveness To Meet Unique And Evolving Client
Requirements
• Successful outsourcing engagements are those where the
service provider is able to be flexible and responsive to
clients’ changing needs
• Adopting innovations is one way to add value and meet
new needs
• Actively manage the performance of the organisation and
continuously improve its capabilities
91. April 3, 2011 91
Issue 18 - Managing Rapid Technological Shifts And
Maintaining The Availability, Reliability, Accessibility And
Security Of Technology
• Technology is a key component of IT outsourcing such as
public cloud
• Challenges for the service provider include keeping pace
with rapid changes in technology and effectively managing
the technology infrastructure while changes are
incorporated
92. April 3, 2011 92
Issue 19 - Capturing And Using Knowledge
• Managing knowledge is critical to a service provider’s
ability to avoid rework and improve the consistency and
quality of work performed by personnel
• includes the effective storage, retrieval and use of
knowledge gained on engagements
93. April 3, 2011 93
Issue 20 - Smoothly Transferring Services And
Resources
• A common cause of failure in outsourcing is the ineffective
management of the transfer of services and resources to
and from the service provider leading to service delivery
problems
• Successful service providers rigorously control the transfer
of services and resources to ensure that the new service
provider is able to adequately deliver the service and that
service continuity is maintained
94. April 3, 2011 94
Issue 21 - Maintaining Continuity Of The Service
Delivery
• Effectiveness of outsourcing is related to the service
provider’s ability to maintain service continuity despite any
problems that arise
• Successful providers manage service continuity by
effectively controlling and preventing problems during
service delivery, preparing and responding to threats and
coordinating the transfer of service during periods of
transition
95. April 3, 2011 95
Issue 22 - Capturing And Transferring Knowledge
Gained To The Client During Contract Completion
• Frequent concern of clients who consider outsourcing is
that in-house knowledge will be eroded, making it
impossible to bring outsourced services back in-house
• Successful service providers address this concern by
making provisions for capturing and transferring
knowledge back to the client during contract completion
96. April 3, 2011 96
Issue 23 - Measuring And Analysing The Reasons for
Termination to prevent Reoccurrence
• Termination may happen for a number of reasons,
including an inability of the service provider to meet
changing client needs, resolve problems, meet
commitments, or match the capabilities of competitors
• Analysing the reasons for termination and taking action
based on the findings helps to prevent issues from
recurring with other clients and ensure the long-term
success of the service provider
97. April 3, 2011 97
Key Capabilities and Constituent Practices
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
98. April 3, 2011 98
1 Service Transfer - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
99. April 3, 2011 99
1 Service Transfer - 1.1 Resources Transferred In
• Scope
− Establish and implement procedures to verify and account for
resources transferred to the organisation
• Track and manage resource transfers in order to facilitate a smooth transfer
of responsibilities prior to service delivery
• Activities
− Provide support for creating and maintaining the procedures for
verifying and accounting for resources transferred to the
organisation
− Document and implement the procedures for verifying and
accounting for resources transferred to the organisation
− Support the implementation of the procedures for verifying and
accounting for resources transferred to the organisation
100. April 3, 2011 100
1 Service Transfer - 1.2 Personnel Transferred In
• Scope
− Establish and implement procedures to manage the transfer of
personnel to the organisation
• Transfer the necessary personnel and ensure that the necessary personnel
competencies are in place in order to enable the organisation to effectively
deliver service
• Activities
− Provide support for creating and maintaining the procedures for
managing the transfer of personnel to the organisation
− Document and implement the procedures for managing the
transfer of personnel to the organisation
− Support the implementation of the procedures for managing the
transfer of personnel to the organisation
101. April 3, 2011 101
1 Service Transfer - 1.3 Service Continuity
• Scope
− Establish and implement procedures to ensure the continuity of
service
• Maintain service continuity as service is transferred to the client, or to
another service provide, in order to improve client satisfaction
• Activities
− Provide support for creating and maintaining the procedures for
ensuring continuity of service across the organisation
− Document and implement the procedures for ensuring continuity
of service
− Support the implementation of the procedures for ensuring
continuity of service across the organisation
102. April 3, 2011 102
1 Service Transfer - 1.4 Resources Transferred Out
• Scope
− Establish and implement procedures to transfer resources from
the organisation
• Manage the transfer of resources in order to help ensure a smooth hand-
over and improve the client’s satisfaction, thereby establishing a basis for
future relationships with the client
• Activities
− Provide support for creating and maintaining the procedures for
transferring resources from the organisation
− Document and implement the procedures for transferring
resources from the organisation
− Support the implementation of the procedures for transferring
resources from the organisation
103. April 3, 2011 103
1 Service Transfer - 1.5 Personnel Transferred Out
• Scope
− Establish and implement procedures to manage the transfer of
personnel from the organisation
• Activities
− Provide support for creating and maintaining the procedures for
managing the transfer of personnel from the organisation
− Document and implement the procedures for managing the
transfer of personnel from the organisation
− Support the implementation of the procedures for managing the
transfer of personnel from the organisation
104. April 3, 2011 104
1 Service Transfer - 1.6 Knowledge Transferred Out
• Scope
− Establish and implement procedures to transfer to the client the
knowledge gained from the specific client engagement
• Activities
− Provide support for creating and maintaining the procedures for
transferring knowledge to the client
− Document and implement the procedures for transferring
knowledge to the client
− Support the implementation of the procedures for transferring
knowledge to the client
105. April 3, 2011 105
2 Contracting - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
106. April 3, 2011 106
2 Contracting - 2.1 Negotiations
• Scope
− Establish and implement guidelines for negotiations with current
or prospective clients
• Activities
− Provide support for creating and maintaining the guidelines for
negotiations with current or prospective clients across the
organisation
− Document and implement the guidelines for negotiations with
current or prospective clients
− Support the implementation of guidelines for negotiations with
current or prospective clients across the organisation
107. April 3, 2011 107
2 Contracting - 2.2 Pricing
• Scope
− Establish and implement guidelines for pricing services
• Activities
− Provide support for creating and maintaining the guidelines for
pricing services
− Document and implement the guidelines for pricing services
− Support the implementation of guidelines for pricing services
108. April 3, 2011 108
2 Contracting - 2.3 Confirm Existing Conditions
• Scope
− Establish and implement guidelines for confirming existing
conditions about potential engagements
• Activities
− Provide support for creating and maintaining the guidelines for
confirming existing conditions
− Document and implement the guidelines for confirming existing
conditions
− Support the implementation of guidelines for confirming existing
conditions
109. April 3, 2011 109
2 Contracting - 2.4 Market Information
• Scope
− Analyse and use market information about prospective clients
• Activities
− Provide support for creating and maintaining the work products
and tasks for analysing and using market information about
prospective clients
− Document and implement the work products and tasks required
for analysing and using market information about prospective
clients
− Support the implementation of analysing and using market
information about prospective clients
110. April 3, 2011 110
2 Contracting - 2.5 Plan Negotiations
• Scope
− Plan and track negotiations with current or prospective clients
• Activities
− Provide support for creating and maintaining the work products
and tasks for planning and tracking client negotiations
− Document and implement the work products and tasks required
for planning and tracking client negotiations
− Support the implementation of planning and tracking client
negotiations
111. April 3, 2011 111
2 Contracting - 2.6 Gather Requirements
• Scope
− Establish and implement procedures to gather a client’s
requirements
• Activities
− Provide support for creating and maintaining the procedures for
gathering requirements
− Document and implement the procedures for gathering
requirements
− Support the implementation of the procedures for gathering
requirements
112. April 3, 2011 112
2 Contracting - 2.7 Review Requirements
• Scope
− Prior to committing to the prospective client, review
requirements and verify that the organisation can meet them
• Activities
− Provide support for creating and maintaining the work products
and tasks for reviewing requirements and verifying that the
organisation can meet them
− Document and implement the work products and tasks required
for reviewing requirements and verifying that the organisation
can meet them
− Support the implementation of reviewing requirements and
verifying that the organisation can meet them
113. April 3, 2011 113
2 Contracting - 2.8 Respond to Requirements
• Scope
− Establish and implement procedures to respond to the
requirements of a prospective client
• Activities
− Provide support for creating and maintaining the procedures for
responding to requirements
− Document and implement the procedures for responding to
requirements
− Support the implementation of the procedures for responding to
requirements
114. April 3, 2011 114
2 Contracting - 2.9 Contract Roles
• Scope
− Establish and implement procedures to respond to the
requirements of a prospective client
• Activities
− Provide support for creating and maintaining the procedures for
responding to requirements
− Document and implement the procedures for responding to
requirements
− Support the implementation of the procedures for responding to
requirements
115. April 3, 2011 115
2 Contracting - 2.10 Create Contracts
• Scope
− Define the roles and responsibilities of the organisation and the client with
respect to the proposed contract
• Consistent and effective legal agreements in order to enable all the parties to have a
clear understanding of what services will be delivered and at what level of quality
• Given the long-term nature of most outsourcing engagements, implementing
procedures for contracts and flexibility in the relationship between the client and
the organisation are critical to success
• Activities
− Provide support for creating and maintaining the work products and tasks for
defining the roles and responsibilities of the organisation and client
− Document and implement the work products and tasks required for defining
the roles and responsibilities of the organisation and client
− Support the implementation of defining the roles and responsibilities of the
organisation and client
116. April 3, 2011 116
2 Contracting - 2.11 Amend Contracts
• Scope
− Establish and implement procedures to amend contracts
• Activities
− Provide support for creating and maintaining the procedures for
amending contracts
− Document and implement the procedures for amending contracts
− Support the implementation of the procedures for amending
contracts
117. April 3, 2011 117
3 Service Design and Deployment - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
118. April 3, 2011 118
3 Service Design and Deployment - 3.1
Communicate Requirements
• Scope
− Establish and implement procedures to communicate the client’s
requirements to the service design and deployment team
• Activities
− Provide support for creating and maintaining the procedures for
communicating requirements
− Document and implement the procedures for communicating
requirements
− Support the implementation of the procedures for
communicating requirements
119. April 3, 2011 119
3 Service Design and Deployment - 3.2 Design and
Deploy Service
• Scope
− Establish and implement procedures to design and deploy the
service to meet client requirements
• Activities
− Provide support for creating and maintaining the procedures for
designing and deploying the service across the organisation
− Document and implement the procedures for designing and
deploying the service
− Support the implementation of the procedures for designing and
deploying the service across the organisation
120. April 3, 2011 120
3 Service Design and Deployment - 3.3 Plan Design
and Deployment
• Scope
− Plan and track the design and deployment of the service
• Activities
− Provide support for creating and maintaining the work products
and tasks for planning and tracking the design and deployment of
the service
− Document and implement the work products and tasks required
for planning and tracking design and deployment
− Support the implementation of planning and tracking the design
and deployment of the service
121. April 3, 2011 121
3 Service Design and Deployment - 3.4 Service
Specification
• Scope
− Create the service specification
• Create a service specification that clearly, accurately and comprehensively describes
the services to be provided in order to effectively meet the client’s requirements
• Service specification is the basis for designing, deploying and delivering service. It is
a comprehensive document that describes the services that the organisation
provides to the client and describes how end-users request services
• Describes the available services, the agreed-upon service levels, if any and the
interfaces between the organisation, the clients and the end-users
• As the service evolves over time, the service specification is modified to document
the changing expectations of the client and the organisation
• Activities
− Provide support for creating and maintaining the work products and tasks for
creating the service specification
− Document and implement the work products and tasks required for creating
the service specification
− Support the implementation of creating the service specification
122. April 3, 2011 122
3 Service Design and Deployment - 3.5 Service
Design
• Scope
− Create the service design based on the service specification
• Ensure that the service design is based on the client’s requirements and the
set of services specified in the agreed-upon service specification in order to
effectively meet the client’s requirements
• Activities
− Provide support for creating and maintaining the work products
and tasks for creating the service design
− Document and implement the work products and tasks required
for creating the service design
− Support the implementation of creating the service design
123. April 3, 2011 123
3 Service Design and Deployment - 3.6 Design
Feedback
• Scope
− Establish and implement procedures to obtain feedback from the
client on the designed service and to incorporate necessary
changes
• Activities
− Provide support for creating and maintaining the procedures for
obtaining service design feedback
− Document and implement the procedures for obtaining service
design feedback
− Support the implementation of the procedures for obtaining
service design feedback
124. April 3, 2011 124
3 Service Design and Deployment - 3.7 Verify Design
• Scope
− Establish and implement procedures to review and verify the
service design
• Activities
− Provide support for creating and maintaining the procedures for
service design review and verification across the organisation
− Document and implement the procedures for service design
review and verification
− Support the implementation of the procedures for service design
review and verification
125. April 3, 2011 125
3 Service Design and Deployment - 3.8 Deploy
Service
• Scope
− Deploy the service based on the service design
• Activities
− Provide support for creating and maintaining the work products
and tasks for deploying the service
− Document and implement the work products and tasks required
for deploying the service
− Support the implementation of deploying the service
126. April 3, 2011 126
4 Service Delivery - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
127. April 3, 2011 127
4 Service Delivery - 4.1 Plan Service Delivery
• Scope
− Plan and track the service delivery according to the service design
• Activities
− Provide support for creating and maintaining the work products
and tasks for planning and tracking the service delivery
− Document and implement the work products and tasks required
for planning and tracking service delivery
− Support the implementation of planning and tracking the service
delivery
128. April 3, 2011 128
4 Service Delivery - 4.2 Train Clients
• Scope
− Establish and implement procedures to train clients and end-users
• Activities
− Provide support for creating and maintaining the procedures for
training clients and end-users
− Document and implement the procedures for training clients and
end-users
− Support the implementation of the procedures for training clients
and end-users
129. April 3, 2011 129
4 Service Delivery - 4.3 Deliver Service
• Scope
− Deliver service according to the service delivery plans
• Activities
− Provide support for creating and maintaining the work products
and tasks for delivering service
− Document and implement the work products and tasks required
for delivering service
− Support the implementation of delivering service
130. April 3, 2011 130
4 Service Delivery - 4.4 Verify Service Commitments
• Scope
− Establish and implement procedures to measure and verify that
service commitments are being met
• Activities
− Provide support for creating and maintaining the procedures for
verifying service commitments
− Document and implement the procedures for verifying service
commitments
− Support the implementation of the procedures for verifying
service commitments
131. April 3, 2011 131
4 Service Delivery - 4.5 Correct Problems
• Scope
− Establish and implement procedures to correct problems
• Activities
− Provide support for creating and maintaining the procedures for
correcting problems
− Document and implement the procedures for correcting problems
− Support the implementation of the procedures for correcting
problems
132. April 3, 2011 132
4 Service Delivery - 4.6 Prevent Known Problems
• Scope
− Establish and implement procedures to take preventive action for
known problems
• Activities
− Provide support for creating and maintaining the procedures for
taking preventive actions for known problems across the
organisation
− Document and implement the procedures for taking preventive
actions for known problems
− Support the implementation of the procedures for taking
preventive actions for known problems across the organisation
133. April 3, 2011 133
4 Service Delivery - 4.7 Service Modifications
• Scope
− Establish and implement procedures to make modifications to
services
• Activities
− Provide support for creating and maintaining the procedures for
modifying services
− Document and implement the procedures for modifying services
− Support the implementation of the procedures for modifying
services
134. April 3, 2011 134
4 Service Delivery - 4.8 Financial Management
• Scope
− Establish and implement procedures for financial management of
the engagement
• Activities
− Provide support for creating and maintaining the procedures for
financial management of the engagement
− Document and implement the procedures for the financial
management of the engagement
− Support the implementation of the procedures for financial
management of the engagement
135. April 3, 2011 135
5 Knowledge Management - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Completion
Delivery Ongoing
1 Service
Transfer
2 Contracting
3 Service Design
and Deployment
4 Service
Delivery
5 Knowledge
Management
6 People
Management
7 Performance
Management
8 Relationship
Management
9 Technology
Management
10 Threat
Management
1.1 Resources
Transferred In
1.2 Personnel
Transferred In
1.3 Service
Continuity
1.4 Resources
Transferred Out
1.5 Personnel
Transferred Out
2.1 Negotiations
2.2 Pricing
2.3 Confirm
Existing
Conditions
2.4 Market
Information
2.5 Plan
Negotiations
2.6 Gather
Requirements
2.7 Review
Requirements
2.8 Respond to
Requirements
2.9 Contract
Roles
2.10 Create
Contracts
2.11 Amend
Contracts
3.1
Communicate
Requirements
3.2 Design and
Deploy Service
3.3 Plan Design
and Deployment
3.4 Service
Specification
3.5 Service
Design
3.6 Design
Feedback
3.7 Verify Design
3.8 Deploy
Service
4.1 Plan Service
Delivery
4.2 Train Clients
4.3 Deliver
Service
4.4 Verify Service
Commitments
4.5 Correct
Problems
4.6 Prevent
Known Problems
4.7 Service
Modifications
4.8 Financial
Management
5.1 Share
Knowledge
5.2 Provide
Required
Information#
5.3 Knowledge
System
5.4 Process
Assets
5.5 Engagement
Knowledge
5.6 Reuse
5.7 Version and
Change Control
5.8 Resource
Consumption
6.1 Encourage
Innovation
6.2 Participation
in Decisions
6.3 Work
Environment
6.4 Assign
Responsibilities
6.5 Define Roles
6.6 Workforce
Competencies
6.7 Plan and
Deliver Training
6.8 Plan and
Deliver Training
6.9 Performance
Feedback
6.10
Performance
Feedback
6.11 Rewards
7.1 Engagement
Objectives
7.2 Verify
Processes
7.3 Adequate
Resources
7.4
Organisational
Objectives
7.5 Review
Organisational
Performance
7.6 Make
Improvements
7.7 Achieve
Organisational
Objectives
7.8 Capability
Baselines
7.9 Benchmark
7.10 Prevent
Potential
Problems
7.11 Deploy
Innovations
1.6 Knowledge
Transferred Out
8.1 Client
Interactions
8.2 Select
Suppliers and
Partners
8.3 Manage
Suppliers and
Partners
8.4 Cultural Fit
8.5 Stakeholder
Information
8.6 Client
Relationships
8.7 Supplier and
Partner
Relationships
8.8 Value
Creation
9.1 Acquire
Technology
9.2 Technology
Licenses
9.3 Control
Technology
9.4 Technology
Integration
9.5 Optimise
Technology
9.6 Proactively
Introduce
Technology
10.1 Risk
Management
10.2 Engagement
Risk
10.3 Risk Across
Engagements
10.4 Security
10.5 Intellectual
Property
10.6 Statutory
and Regulatory
Compliance
10.7 Disaster
Recovery
136. April 3, 2011 136
5 Knowledge Management - 5.1 Share Knowledge
• Scope
− Establish and implement a policy to share knowledge among
stakeholders
• Activities
− Provide support for creating and maintaining a policy for sharing
knowledge among stakeholders across the organisation
− Document and implement a policy for sharing knowledge among
stakeholders
− Support the implementation of a policy for sharing knowledge
among stakeholders across the organisation
137. April 3, 2011 137
5 Knowledge Management - 5.2 Provide Required
Information
• Scope
− Identify, control and provide the information that personnel need
to perform their work
• Activities
− Provide support for creating and maintaining the work products
and tasks for identifying, controlling and providing the
information personnel need to perform their work
− Document and implement work products and tasks required for
identifying, controlling and providing the information personnel
need to perform their work
− Support the implementation of identifying, controlling and
making available the information personnel need to perform their
work
138. April 3, 2011 138
5 Knowledge Management - 5.3 Knowledge System
• Scope
− Establish and maintain a knowledge system to identify, control
and provide information
• Activities
− Provide support for creating and maintaining the work products
and tasks for establishing and maintaining a knowledge system
for use across the organisation
− Document and implement work products and tasks required for
establishing and maintaining a knowledge system
− Support the implementation of establishing and maintaining a
knowledge system for use across the organisation
139. April 3, 2011 139
5 Knowledge Management - 5.4 Process Assets
• Scope
− Establish and maintain a set of process assets for use across the
organisation
• Activities
− Provide support for creating and maintaining the work products
and tasks for establishing and maintaining a set of process assets
for use across the organisation
− Document and implement work products and tasks required for
establishing and maintaining a set of process assets
− Support the implementation of establishing and maintaining a set
of process assets for use across the organisation
140. April 3, 2011 140
5 Knowledge Management - 5.5 Engagement
Knowledge
• Scope
− Analyse and use knowledge gained from client engagements
• Activities
− Provide support for creating and maintaining the work products
and tasks for analysing and using knowledge gained from client
engagements across the organisation
− Document and implement work products and tasks required for
analysing knowledge gained from client engagements
− Support the implementation of analysing and using knowledge
gained from client engagements across the organisation
141. April 3, 2011 141
5 Knowledge Management - 5.6 Reuse
• Scope
− Identify and reuse work products
• Activities
− Provide support for creating and maintaining the work products
and tasks for identifying and reusing work products across the
organisation
− Document and implement work products and tasks required for
identifying and reusing work products
− Support the implementation of identifying and reusing work
products across the organisation
142. April 3, 2011 142
5 Knowledge Management - 5.7 Version and Change
Control
• Scope
− Establish and implement procedures to apply version control and
change control to work products
• Activities
− Provide support for creating and maintaining the procedures for
version control and change control
− Document and implement the procedures for version control and
change control
− Support the implementation of the procedures for version control
and change control
143. April 3, 2011 143
5 Knowledge Management - 5.8 Resource
Consumption
• Scope
− Establish and implement procedures to analyse and use
information on resources consumed
• Activities
− Provide support for creating and maintaining the procedures for
analysing and using information on resource consumption
− Document and implement the procedures for analysing and using
information on resource consumption
− Support the implementation of the procedures for analysing and
using information on resource consumption