Presentation from 3gamma lunchseminar 23 April 2014

1. VENDOR BASE FLEXIBILITY
3gamma lunchseminarium 23 April
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2. About 3gamma
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3gamma Capabilities
IT Strategy and Governance
IT Sourcing
IT Operational Excellence
IT Project Management and
Delivery
 We are an independent consultancy firm specializing in IT management
 We offer practical, results-oriented advisory and consulting services based on significant IS/IT experience
 We can assist any organization through the entire IT sourcing life-cycle, enhancing IT effectiveness and improving
operational efficiency
 We are 100 consultants in Stockholm, Gothenburg, Malmo, Manchester, Helsinki and New Jersey

3. Vendor base flexibility – why is the topic on the agenda?
Development of the outsourcing landscape
 Outsourcing maturity – but still a growing market (2nd and 3rd
wave of outsourcing)
 Business drivers – from cost focus to value for money
(innovation, time to market, capabilities)
 From single-sourcing to multi-sourcing
 Shorter contract periods
 Shift of ”what” and ”how” – asset-light (cloud services)
consumption , effect based delivery models, end-to-end service
integration
 Insourcing…
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4. Vendor base flexibility – why is the topic on the agenda?
Companies are not satisfied with the delivered services
 Costs higher than expected – eroding business case
 Limited vendor ability and contract support for effect based
delivery
 Quality of delivery not satisfactory – dispute over SLAs and
penalty charges
 Underestimating the effort to manage vendors and to build a
retained organization with the right capabilities
…but still many companies choose to renew contracts with
existing vendors
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5. Why is it difficult to shift vendor?
 Not considering the entire outsourcing life-cycle;
primarily focus on contractual aspects and exit strategy
in contract
 Lock-in effects built in when developing the sourcing
strategy (processes, tools, architecture and integration,
capabilities/people) making it difficult to shift vendor
 Lack of capability and capacity to manage vendor in run
phase to avoid and limit potential lock-in effects
 Limited experience of how to shift vendor – how to do
it, without disrupting business operations
The business risk – Stuck with a vendor not delivering the
right service, at the right quality and at the right cost
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6. Strategies for creating vendor base flexibility (1/2)
 Adopt an end-to-end and multi-disciplinary mindset and
approach - considering entire outsourcing life cycle, combining
Business/IT and legal outsourcing expertise
o Sourcing strategy (how you define and cluster sourcing
objects, architecture and integration considerations)
o Outsourcing contract – exit strategy
o In-contract, before renewal of contract – vendor shift
readiness assessment
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7. Strategies for creating vendor base flexibility (2/2)
 Regularly assess internal “vendor shift readiness”
o Risks
o Lock-in mechanisms (processes, architecture,
integration, tools etc.)
o Contract
o Change effort
o External market capability
 Actively manage your vendor base (as opposed to the
other way around) and be aware of potential lock-in
effects and how to limit them
 Develop and maintain execution capability – ability to
transfer services from one vendor to another vendor (or
insource)
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8. Service integration in a multi-sourcing environment – different options for creating
flexibility and control
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Type 1. Retained integrator
”Client responsible for service integration”
Type 2. Third party
”Integration is delegated to a third party”
Type 3. Guardian vendor
”Single vendor responsible for service integration”
Type 4. Prime contractor
”Single vendor accountable for all services”

9. England
3gamma Ltd
Suite D, Silk Point
Hulley Road Macclesfield
Cheshire SK10 2LL
Phone +44 161 219 8240
Group Head Office
3gamma Group
Drottningtorget 5
SE-411 03 Göteborg
Sweden
Phone: +46 31 309 7910
Stockholm
3gamma Sweden AB
Drottninggatan 92-94
SE-111 36 Stockholm
Sweden
Phone: +46 8 748 0330
Göteborg
3gamma Sweden AB
Drottningtorget 5
SE-411 03 Göteborg
Sweden
Phone: +46 31 309 7910
Malmö
3gamma Sweden AB
WTC Teknikportalen
Skeppsgatan 19
SE-211 19 Malmö
Sweden
Phone : +46 40 627 04 05
Finland
3gamma OY
Sentnerikuja 2
FI-00440 Helsinki
Phone +358 50 3 748 371
USA
3gamma Americas LLC
4 Rupells Road
Clinton, NJ 08809
USA
Phone: +1 908 894-5126