1B - Outsourcing - Kevin Calder & Peter Wainman


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1B - Outsourcing - Kevin Calder & Peter Wainman

  1. 1. Outsourcing IT servicesTitle goes hereHow to get the gain without the pain Subtitle goes here20 March 2013 Name Surname One Name Surname TwoKevin Calder – kevin.calder@mills-reeve.comPeter Wainman – peter.wainman@mills-reeve.com
  2. 2. Introduction to Mills & Reeveo Leading national firmo Substantial expertise in: – IT and outsourcing o Cloud and CRM – Charities and public sector – Public procurement o Advising charities on bidding where public bodies outsource their functions
  3. 3. Introduction to today’s sessiono Save the Lawyers – Case study – Based on a true story – Kevin Calder, Finance Director (and CIO)o Legal contexto Tips and tricks
  4. 4. Scopeo Outsourcing procurement: – requirements and solutionso Managing change: – adapting to the changing business needs of charitieso Supply chain management: – working in multi-supplier environmentso Delivery: – managing outsourcing contracts
  5. 5. Requirements and solutionso Save the Lawyers: case study part 1 – Managed services procurement including CRM – Existing system(s) not fit for purpose – Key system end of life in 3 months – Limited budget for procurement exercise – Received a brochure from WebCo CRM – Ideal solution = get the bidders to do the work
  6. 6. Requirements and solutionso Why are we talking about this? – Uncertainty over what customer is buying – Biggest cause of disputes between customers and suppliers – and of outsourcing failingo What are the issues for Save the Lawyers? – Brochure is a solution not requirements – Sales wording typically vague – Supplier knows what it can offer not what Kevin needs – Even if have requirements, how will supplier’s proposal fit into the contract?
  7. 7. Requirements and solutionso Does this really happen? – Client outsourced all IT services – specification agreed in a rush – Cost of contract changes and management timeo Tips and tricks – Don’t rush in – urgency not a reason to get it wrong – extensions, interim solutions – Requirements not solutions – what you want the supplier to do for you not how it will do it – Contractual clarity – fix conflicts; consider agreeing specification; ensure clear, shared understanding of what will be delivered – Iterative development – “agile”
  8. 8. Adapting to changing business needso Save the Lawyers: case study part 2 – Signed a managed services contract with WebCo – Save the Lawyers is merging with Barrister Benefit Fund – BBF is split into 20 regional offices, each with its own local CRM database – Clear benefits of a cloud hosting solution – Contract with WebCo CRM is specific on the platform, location and the size of the database – WebCo CRM are launching a cloud enabled version of their system, but not until 2014
  9. 9. Adapting to changing business needso Why are we talking about this? – Change is a fact of life – charities don’t stay still and neither does technologyo What are the issues for Save the Lawyers? – What does the contract say? – Uncertain cost to add BBF/additional sites – Problems interfacing with existing systems/transferring data – Uncertain timing and cost of cloud solution
  10. 10. Adapting to changing business needso Does this really happen? – Licence, support and service levels based on metrics – Anticipated changeso Tips and tricks – Price known changes – volume and scope changes, catalogue – Avoid exclusivity – commercial incentive to deliver value in change – Build in flexibility – contract change process, recording, changes, early termination
  11. 11. Multi-supplier environmento Save the Lawyers: case study part 3 – Save the Lawyers has moved its hosting to the cloud – WebCo CRM brought forward the launch of their cloud module – Outsourced IT infrastructure provider has built the hosting platform – Project running on schedule – When testing, CRM system falls over whenever any data is imported
  12. 12. Multi-supplier environmento Why are we talking about this? – Increasingly unlikely one supplier will best meet all needso What are the issues for Save the Lawyers? – Incompatibility between cloud platform and infrastructure – How clear is the specification – whose fault is it? – Who is responsible for fixing the problem? – Who bears the cost (Save the Lawyers and suppliers)? – Dealing with problems will cause delay
  13. 13. Multi-supplier environmento Does this really happen? – Separate application developer and infrastructure provider – Testing failures, delay, dispute about responsibilityo Tips and tricks – Integrator role – charity or supplier (specialist integrator?) – Cooperation between suppliers – working together, sharing information, OLAs – Contractual clarity – scope, testing, roles
  14. 14. Managing an outsourcing contracto Save the Lawyers: case study part 4 – We fixed the data import issue but… – New cloud CRM system is generally unreliable – Number of outages – Most recently, it has been down for 5 consecutive days – Fundraising newsletter is due to be issued this week
  15. 15. Managing an outsourcing contracto Why are we talking about this? – Horse in your cow – Successful outsourcing long-term partnership – however hard you try, contract may not cover ito What are the issues for Save the Lawyers? – Increased cost to fix problems – Alternative solutions - who bears the cost? – Termination unlikely to be practical option
  16. 16. Managing an outsourcing contracto Does this really happen? – Poor performance across range of issues – Cost of transferring to replacement unaffordable; data centre means effectively exclusivity – Contract not clearo Tips and tricks – Tools to manage – service levels – Tools to check – audit, reporting, management information – Tools to resolve – remediation, step-in, withholding payment, escalation, dispute resolution – Relationship management - commercial leverage; incentives for improvement; going elsewhere
  17. 17. Conclusiono Don’t rush in – outsourcing is a long term commitment and justifies investment up fronto Get the contract right – resolving issues later leads to disproportionate cost and risko Actively manage the contract and relationship – be prepared to deal with change; falling out is expensive