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Contract Management & Governance
CONTENTS
‣ The Dark Arts of
        ➡        IT Value

‣ The Dark Arts of
        ➡        IT Delivery

‣ The Dark Arts of
        ➡        IT Governance

‣ The Dark Arts of
        ➡        Managing the Contracts that bring it all together




© Wu Wise 2012                                                       2
THE DARK ARTS
     OF
  IT VALUE
WHAT’S THE DIFFERENCE?
WHAT’S THE DIFFERENCE?
WHAT’S THE DIFFERENCE?
WHAT’S YOUR VALUE DRIVER?
‣ How nice it is to use or eat (usability, taste)
‣ How hard it is to make (complexity)
‣ How scarce it is (availability)
‣ How innovative it is
‣ What’s in it (ingredients, components)
‣ Who created it
‣ How long it stays the same (stability, keeping quality)
‣ Specific user wishes (no fish, no wordpress, no open source)
‣ Etc.

© Wu Wise 2012                                                 7
THE DARK ARTS
      OF
 IT DELIVERY
WHAT’S THE SIMILARITY?
READY MADE

             ‣ production ‘behind the scenes’
             ‣   standardized production process
             ‣   little interaction with end-user
             ‣   end-user doesn’t need a recipe
             ‣   takes little effort from end-user to prepare
             ‣   need a microwave
             ‣   fixed quality
             ‣   fixed price
Ready made   Convenience   Supermarket   Farmer
READY MADE

             customization possible

             run time

             internal knowledge needed

             external cost

             internal cost
customization possible      customization possible

run time                    run time

internal knowledge needed   internal knowledge needed

external cost               external cost

internal cost               internal cost




customization possible      customization possible

run time                    run time

internal knowledge needed   internal knowledge needed

external cost               external cost

internal cost               internal cost
DELIVERY
‣ As soon as number of suppliers grows:
        ➡        interdependencies grow dramatically
        ➡        costs as well as (end product) quality and run time are getting more fluid
        ➡        internal governance is crucial

‣ Choice of delivery model depends on:
        ➡        internal knowledge and infrastructure available / required
        ➡        need for tailor made IT
        ➡        external suppliers and solutions available
        ➡        need for specific run time
        ➡        costs of internal vs external resources




© Wu Wise 2012                                                                               14
THE DARK ARTS
      OF
IT GOVERNANCE
WHO IS RESPONSIBLE?




 CPO       CFO        CIO
GOVERNANCE
‣ Who is doing what?
        ➡        Who is talking with end-users about money and quality?
        ➡        Who is talking with suppliers/IT department about money and quality?
        ➡        When alterations to the original plan need to take place, who does what?
        ➡        Who is delivering which part of the service? And who monitors?
        ➡        Partnership does not imply absence of task distinction

‣ Who is owning what?
        ➡        Who’s responsible when things go wrong?
        ➡        Is there a difference between financial and service related ownership?
        ➡        Who is benefitting cost reductions or quality / compliance improvements?
        ➡        Governance support: restaurant model


© Wu Wise 2012                                                                              17
GOVERNANCE
                                                                                                      We apo
                                                             Demand       Supply                             lo
                                                                                                      english gize for not h
                                                                                                             on the         a
                                                                                                                    restaur ving
                                                                                                              menu y       ant’s
                                                                                                                     et

                                           Dat zal ik even                           Nee, maar
                                          voor u navragen     Hebben we            we kunnen wel...
                       Heeft u ook... ?                        ook... ?




          Familie



                       Gast               Ober               Ober           Chef-Kok


                    RESTAURANT                                                       KEUKEN




© Wu Wise 2012                                                                                                              18
GOVERNANCE
                                                                                                                    We apo
                                                             Demand       Supply                                           lo
                                                                                                                    english gize for not h
                                                                                                                           on the         a
                                                                                                                                  restaur ving
                                                                                                                            menu y       ant’s
                                                                                                                                   et

                                           Dat zal ik even                          Dat zal ik even
                                          voor u navragen     Hebben we            voor u navragen
                       Heeft u ook... ?                        ook... ?

                                                                                                                        Leverancier
                                                                                                                         Groenten



                                                                                                      Garde               Leverancier
          Familie                                                                                                            Vlees
                                                                                                       Rotisserie

                       Gast               Ober               Ober           Chef-Kok                                         Leverancier
                                                                                                         Entre metier         Patisserie

                    RESTAURANT                                                       KEUKEN




© Wu Wise 2012                                                                                                                             19
GOVERNANCE
                                                                                                                                                 We apo
                                                                    Demand             Supply                                                           lo
                                                                                                                                                 english gize for not h
                                                                                                                                                        on the         a
                                                                                                                                                               restaur ving
                                                                                                                                                         menu y       ant’s
                                                                                                                                                                et
                                                                                                                     Prijs en kwaliteit
                                                        Kwaliteit




                                                                                                                                                      Leverancier
                                                                                                                                                       Groenten
                                                                                                                                  Inhoud

                                                                           Flexibiliteit
                                             Prijs en                           en
                                             inhoud                                                                      Garde                          Leverancier
                                                                            kwaliteit
          Familie                                                                                                                                          Vlees

                                                                                                   kwaliteit,                Rotisserie
                    Inhoud                                                                        flexibiliteit

                             Gast                           Ober    Ober                   Chef-Kok                                                        Leverancier
                                                                                                                                Entre metier                Patisserie


                             Flexibiliteit


                                                                                                                  Kwaliteit, prijs en flexibiliteit




© Wu Wise 2012                                                                                                                                                           20
THE DARK ARTS
     OF
IT CONTRACTS
CONTRACT PYRAMID - 1
‣ Governance
        -        Wishes and needs

        -        Contract

        -        Actual delivery




© Wu Wise 2012                      22
CONTRACT PYRAMID - 2
‣ Subjects
        -        Finance



        -        Service



        -        Relation and Communication




© Wu Wise 2012                                23
WU WISE VISION
‣ Contract management is making sure the deal comes true
‣ Contract management is a shared effort
‣ Without knowing what is agreed upon, contract management is
  hard and subject to personal perception (even more than it
  already is)
‣ Therefore, making sure contracts are easy to understand or
  someone ‘translates and communicates’ them is important
‣ Without in-between monitoring, evaluation and adjustment,
  agreements are useless. Unless agreed upon otherwise (but maybe
  even then).




© Wu Wise 2012                                                  24
WU WISE SERVICES
‣ Contract administration
‣ Contract performance monitoring
‣ End-user needs evaluation
‣ Contract- and supplier management
‣ “Making IT deals come true”




© Wu Wise 2012                        25
THE
END

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Dark Art of IT Procurement

  • 2. CONTENTS ‣ The Dark Arts of ➡ IT Value ‣ The Dark Arts of ➡ IT Delivery ‣ The Dark Arts of ➡ IT Governance ‣ The Dark Arts of ➡ Managing the Contracts that bring it all together © Wu Wise 2012 2
  • 3. THE DARK ARTS OF IT VALUE
  • 7. WHAT’S YOUR VALUE DRIVER? ‣ How nice it is to use or eat (usability, taste) ‣ How hard it is to make (complexity) ‣ How scarce it is (availability) ‣ How innovative it is ‣ What’s in it (ingredients, components) ‣ Who created it ‣ How long it stays the same (stability, keeping quality) ‣ Specific user wishes (no fish, no wordpress, no open source) ‣ Etc. © Wu Wise 2012 7
  • 8. THE DARK ARTS OF IT DELIVERY
  • 10. READY MADE ‣ production ‘behind the scenes’ ‣ standardized production process ‣ little interaction with end-user ‣ end-user doesn’t need a recipe ‣ takes little effort from end-user to prepare ‣ need a microwave ‣ fixed quality ‣ fixed price
  • 11. Ready made Convenience Supermarket Farmer
  • 12. READY MADE customization possible run time internal knowledge needed external cost internal cost
  • 13. customization possible customization possible run time run time internal knowledge needed internal knowledge needed external cost external cost internal cost internal cost customization possible customization possible run time run time internal knowledge needed internal knowledge needed external cost external cost internal cost internal cost
  • 14. DELIVERY ‣ As soon as number of suppliers grows: ➡ interdependencies grow dramatically ➡ costs as well as (end product) quality and run time are getting more fluid ➡ internal governance is crucial ‣ Choice of delivery model depends on: ➡ internal knowledge and infrastructure available / required ➡ need for tailor made IT ➡ external suppliers and solutions available ➡ need for specific run time ➡ costs of internal vs external resources © Wu Wise 2012 14
  • 15. THE DARK ARTS OF IT GOVERNANCE
  • 16. WHO IS RESPONSIBLE? CPO CFO CIO
  • 17. GOVERNANCE ‣ Who is doing what? ➡ Who is talking with end-users about money and quality? ➡ Who is talking with suppliers/IT department about money and quality? ➡ When alterations to the original plan need to take place, who does what? ➡ Who is delivering which part of the service? And who monitors? ➡ Partnership does not imply absence of task distinction ‣ Who is owning what? ➡ Who’s responsible when things go wrong? ➡ Is there a difference between financial and service related ownership? ➡ Who is benefitting cost reductions or quality / compliance improvements? ➡ Governance support: restaurant model © Wu Wise 2012 17
  • 18. GOVERNANCE We apo Demand Supply lo english gize for not h on the a restaur ving menu y ant’s et Dat zal ik even Nee, maar voor u navragen Hebben we we kunnen wel... Heeft u ook... ? ook... ? Familie Gast Ober Ober Chef-Kok RESTAURANT KEUKEN © Wu Wise 2012 18
  • 19. GOVERNANCE We apo Demand Supply lo english gize for not h on the a restaur ving menu y ant’s et Dat zal ik even Dat zal ik even voor u navragen Hebben we voor u navragen Heeft u ook... ? ook... ? Leverancier Groenten Garde Leverancier Familie Vlees Rotisserie Gast Ober Ober Chef-Kok Leverancier Entre metier Patisserie RESTAURANT KEUKEN © Wu Wise 2012 19
  • 20. GOVERNANCE We apo Demand Supply lo english gize for not h on the a restaur ving menu y ant’s et Prijs en kwaliteit Kwaliteit Leverancier Groenten Inhoud Flexibiliteit Prijs en en inhoud Garde Leverancier kwaliteit Familie Vlees kwaliteit, Rotisserie Inhoud flexibiliteit Gast Ober Ober Chef-Kok Leverancier Entre metier Patisserie Flexibiliteit Kwaliteit, prijs en flexibiliteit © Wu Wise 2012 20
  • 21. THE DARK ARTS OF IT CONTRACTS
  • 22. CONTRACT PYRAMID - 1 ‣ Governance - Wishes and needs - Contract - Actual delivery © Wu Wise 2012 22
  • 23. CONTRACT PYRAMID - 2 ‣ Subjects - Finance - Service - Relation and Communication © Wu Wise 2012 23
  • 24. WU WISE VISION ‣ Contract management is making sure the deal comes true ‣ Contract management is a shared effort ‣ Without knowing what is agreed upon, contract management is hard and subject to personal perception (even more than it already is) ‣ Therefore, making sure contracts are easy to understand or someone ‘translates and communicates’ them is important ‣ Without in-between monitoring, evaluation and adjustment, agreements are useless. Unless agreed upon otherwise (but maybe even then). © Wu Wise 2012 24
  • 25. WU WISE SERVICES ‣ Contract administration ‣ Contract performance monitoring ‣ End-user needs evaluation ‣ Contract- and supplier management ‣ “Making IT deals come true” © Wu Wise 2012 25