Outsourcing & Cloud Computing

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Implementing Outsourcing Effectively Within The Context of Cloud Computing by Alan McSweeney

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Outsourcing & Cloud Computing

  1. 1. Implementing OutsourcingEffectively Within theContext of Cloud Computing(And More Generally)Alan McSweeney
  2. 2. Objectives• Describe a structured approach to implementing outsourcing from both service provider and end-user organisation perspective in the context of cloud computing (and more generally) April 5, 2010 2
  3. 3. Agenda• Introduction• Outsourcing for Service Providers• Outsourcing for End-User Organisations April 5, 2010 3
  4. 4. Introduction April 5, 2010 4
  5. 5. Scope• In the context of cloud computing, the scope of this material is related to Public Cloud, a shared infrastructure, elements of which may or may not be dedicated, located away from the organisation’s premises accessible to other organisations and with multiple tenants• Moving systems/applications/data to a service provider, in whatever format, constitutes outsourcing/managed service − IaaS - Infrastructure as a Service − PaaS - Platform as a Service − SaaS - Software as a Service − STaaS - Storage as a Service − BRaaS - Backup and recovery as a Service• The business relationship needs to be managed as an outsourcing/managed services arrangement• Failure to do so will lead to problems• Cloud computing is not just a technology arrangement – it is a business services relationship• Do not ignore or underestimate the business nature of the relationship April 5, 2010 5
  6. 6. Types of Outsourcing and Types of Cloud-BasedServices• Rough classification of types of public cloud-based services and types of outsourcing/managed services Business Process Knowledge Application Network Infrastructure Outsourcing (BPO) Process Service Provider Managed Services Managed Services Outsourcing (KPO) (ASP)IaaS(Infrastructure asa Service)PaaS (Platform asa Service)SaaS (Software asa Service)STaaS (Storage asa Service)BRaaS (Backupand recovery as aService) April 5, 2010 6
  7. 7. 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 April 5, 2010 7
  8. 8. Reasons Organisations Outsource Reduce And Control Operating 17% Costs Improve Company Focus 16% Gain Access To World-Class 12% Capabilities Free Resources For Other 12% Purposes Resources Not Available 8% Internally Reduce Time To Market 6% Take Advantage Of 6% Capabilities Accelerate Reengineering 4% Benefits Share Risks 3% Function Difficult To Manage 3% Or Out Of Control April 5, 2010 8
  9. 9. Scope• Not concerned with the advantages, disadvantages, merits, demerits, rights, wrongs of outsourcing• Concerned with outlining a structure that will enable you to get the relationship right, either as a service provider or an end-user• Describe a generalised approach that can be modified to suit requirements of type of outsourcing and of both service providers and client organisations• Migrating applications to a public/virtual private cloud no different from any other outsourcing arrangement• Non-technology issues – people, process and management - dominate• No reason to believe that public cloud implementation will be different from that of other outsourcing experiences April 5, 2010 9
  10. 10. Scope• Not exclusively concerned with public cloud-based services as outsourcing − General notes on all forms of outsourcing• Provide a common language for outsourcing organisations and service providers• Provide a common understanding of roles, responsibilities to increase the chances of a successful relationship April 5, 2010 10
  11. 11. Outsourcing Planning• Structured approach can form the basis for an outsourcing implementation plan for both service providers and for companies performing outsourcing April 5, 2010 11
  12. 12. Sample Service Transfer Plan – Outsourcing ServiceProvider• Plan subset• Based on activities − 1 Service Transfer • 1.1 Resources Transferred In • 1.2 Personnel Transferred In • 1.3 Service Continuity April 5, 2010 12
  13. 13. Sample Service Transfer Plan – OutsourcingOrganisation• 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 April 5, 2010 13
  14. 14. Where Outsourcing Problems Happen• Inadequate Preparation = Savings 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 April 5, 2010 14
  15. 15. 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 April 5, 2010 15
  16. 16. 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 April 5, 2010 16
  17. 17. 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 April 5, 2010 17
  18. 18. Outsourcing/Managed Services Does HaveAdvantages• Better use of personnel allows organisations to focus human resources on core services• Cost savings by not building and supporting IT and network infrastructure and using capital to purchase needed service levels and reduce total cost of ownership• Ability to use most appropriate technologies• Enables faster response to changes as the supplier is measured by ability to produce solutions• But it must be defined as you cannot achieve what has not been defined• Provision of managed service must be based on trust and common goals April 5, 2010 18
  19. 19. 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• Is there any reason to believe these experiences will not be replicated by public cloud-based services and implementations? April 5, 2010 19
  20. 20. 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 April 5, 2010 20
  21. 21. Outsourcing for Service Providers April 5, 2010 21
  22. 22. Phases of Outsourcing Relationship Ongoing Initiation Delivery Completion April 5, 2010 22
  23. 23. 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 April 5, 2010 23
  24. 24. 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 April 5, 2010 24
  25. 25. 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 April 5, 2010 25
  26. 26. 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 April 5, 2010 26
  27. 27. 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 April 5, 2010 27
  28. 28. Key Capabilities Within Outsourcing Lifecycle People Performance Relationship Technology Management Management Management Management Knowledge ThreatManagement Ongoing Management Initiation Delivery Completion Service Design Service Service Service Contracting and Transfer Delivery Transfer Deployment April 5, 2010 28
  29. 29. Key Capabilities and Constituent Practices Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 5, 2010 29
  30. 30. 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 practices 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 April 5, 2010 30
  31. 31. 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 April 5, 2010 31
  32. 32. Key Issues For Successful Outsourcing1. Establishing and maintaining trust with stakeholders2. Managing stakeholder expectations3. Translating implicit and explicit needs into defined requirements with agreed- upon levels of quality4. Establishing well-defined contracts with stakeholders, including clients, suppliers and partners5. Reviewing service design and deployment to ensure adequate coverage of the requirements6. Ensuring the effectiveness of interactions with stakeholders7. Managing supplier and partner relationships to ensure that commitments are met8. Ensuring compliance with statutory and regulatory requirements9. Managing clients’ security10. Managing cultural differences between stakeholders11. Monitoring and controlling activities to consistently meet the service delivery commitments April 5, 2010 32
  33. 33. Key Issues For Successful Outsourcing12. Monitoring and managing clients’ and end-users’ satisfaction13. Building and maintaining the competencies that enable personnel to effectively perform their roles and responsibilities14. Managing employee satisfaction, motivation and retention15. Establishing and maintaining an effective work environment16. Maintaining a competitive advantage17. Innovating, building flexibility and increasing responsiveness to meet unique and evolving client requirements18. Managing rapid technological shifts and maintaining the availability, reliability, accessibility and security of technology19. Capturing and using knowledge20. Smoothly transferring services and resources21. Maintaining continuity of the service delivery22. Capturing and transferring knowledge gained to the client during contract completion23. Measuring and analysing the reasons for termination, to prevent reoccurrence April 5, 2010 33
  34. 34. Issue 1 - Establishing And Maintaining Trust WithStakeholders• 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 April 5, 2010 34
  35. 35. 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 April 5, 2010 35
  36. 36. Issue 3 - Translating Implicit And Explicit Needs Into DefinedRequirements 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 April 5, 2010 36
  37. 37. Issue 4 - Establishing Well-Defined Contracts WithStakeholders, 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 April 5, 2010 37
  38. 38. Issue 5 - Reviewing Service Design And DeploymentTo 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 April 5, 2010 38
  39. 39. Issue 6 - Ensuring The Effectiveness Of InteractionsWith 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 April 5, 2010 39
  40. 40. Issue 7 - Managing Supplier And PartnerRelationships 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 April 5, 2010 40
  41. 41. Issue 8 - Ensuring Compliance With Statutory AndRegulatory 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 April 5, 2010 41
  42. 42. 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 April 5, 2010 42
  43. 43. Issue 10 - Managing Cultural Differences BetweenStakeholders• 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 April 5, 2010 43
  44. 44. Issue 11 - Monitoring And Controlling Activities ToConsistently 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 April 5, 2010 44
  45. 45. Issue 12 - Monitoring And Managing Clients’ AndEnd-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 April 5, 2010 45
  46. 46. Issue 13 - Building And Maintaining The Competencies ThatEnable Personnel To Effectively Perform Their Roles AndResponsibilities• 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. April 5, 2010 46
  47. 47. 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 April 5, 2010 47
  48. 48. Issue 15 - Establishing And Maintaining An EffectiveWork 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 April 5, 2010 48
  49. 49. 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 April 5, 2010 49
  50. 50. Issue 17 - Innovating, Building Flexibility and IncreasingResponsiveness To Meet Unique And Evolving ClientRequirements• 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 April 5, 2010 50
  51. 51. Issue 18 - Managing Rapid Technological Shifts AndMaintaining The Availability, Reliability, Accessibility AndSecurity 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 April 5, 2010 51
  52. 52. 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 April 5, 2010 52
  53. 53. Issue 20 - Smoothly Transferring Services AndResources• 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 April 5, 2010 53
  54. 54. Issue 21 - Maintaining Continuity Of The ServiceDelivery• 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 April 5, 2010 54
  55. 55. Issue 22 - Capturing And Transferring KnowledgeGained 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 April 5, 2010 55
  56. 56. Issue 23 - Measuring And Analysing The Reasons forTermination 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 April 5, 2010 56
  57. 57. Key Capabilities and Constituent Practices Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 5, 2010 57
  58. 58. 1 Service Transfer - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 5, 2010 58
  59. 59. 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 April 5, 2010 59
  60. 60. 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 April 5, 2010 60
  61. 61. 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 April 5, 2010 61
  62. 62. 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 April 5, 2010 62
  63. 63. 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 April 5, 2010 63
  64. 64. 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 April 5, 2010 64
  65. 65. 2 Contracting - Activities Outsourcing Capabilities and Skills Initiation/ Delivery OngoingCompletion 1 Service 3 Service Design 4 Service 5 Knowledge 6 People 7 Performance 8 Relationship 9 Technology 10 Threat 2 Contracting Transfer and Deployment Delivery Management Management Management Management Management Management 3.1 1.1 Resources 4.1 Plan Service 5.1 Share 6.1 Encourage 7.1 Engagement 8.1 Client 9.1 Acquire 10.1 Risk 2.1 Negotiations Communicate Transferred In Delivery Knowledge Innovation Objectives Interactions Technology Management Requirements 5.2 Provide 8.2 Select 1.2 Personnel 3.2 Design and 6.2 Participation 7.2 Verify 9.2 Technology 10.2 Engagement 2.2 Pricing 4.2 Train Clients Required Suppliers and Transferred In Deploy Service in Decisions Processes Licenses Risk Information# Partners 2.3 Confirm 8.3 Manage 1.3 Service 3.3 Plan Design 4.3 Deliver 5.3 Knowledge 6.3 Work 7.3 Adequate 9.3 Control 10.3 Risk Across Existing Suppliers and Continuity and Deployment Service System Environment Resources Technology Engagements Conditions Partners 7.4 1.4 Resources 2.4 Market 3.4 Service 4.4 Verify Service 5.4 Process 6.4 Assign 9.4 Technology Organisational 8.4 Cultural Fit 10.4 Security Transferred Out Information Specification Commitments Assets Responsibilities Integration Objectives 7.5 Review 1.5 Personnel 2.5 Plan 3.5 Service 4.5 Correct 5.5 Engagement 8.5 Stakeholder 9.5 Optimise 10.5 Intellectual 6.5 Define Roles Organisational Transferred Out Negotiations Design Problems Knowledge Information Technology Property Performance 9.6 Proactively 10.6 Statutory 1.6 Knowledge 2.6 Gather 3.6 Design 4.6 Prevent 6.6 Workforce 7.6 Make 8.6 Client 5.6 Reuse Introduce and Regulatory Transferred Out Requirements Feedback Known Problems Competencies Improvements Relationships Technology Compliance 7.7 Achieve 8.7 Supplier and 2.7 Review 4.7 Service 5.7 Version and 6.7 Plan and 10.7 Disaster 3.7 Verify Design Organisational Partner Requirements Modifications Change Control Deliver Training Recovery Objectives Relationships 2.8 Respond to 3.8 Deploy 4.8 Financial 5.8 Resource 6.8 Plan and 7.8 Capability 8.8 Value Requirements Service Management Consumption Deliver Training Baselines Creation 2.9 Contract 6.9 Performance 7.9 Benchmark Roles Feedback 6.10 7.10 Prevent 2.10 Create Performance Potential Contracts Feedback Problems 2.11 Amend 7.11 Deploy 6.11 Rewards Contracts Innovations April 5, 2010 65
  66. 66. 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 April 5, 2010 66
  67. 67. 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 April 5, 2010 67
  68. 68. 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 April 5, 2010 68
  69. 69. 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 April 5, 2010 69
  70. 70. 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 April 5, 2010 70
  71. 71. 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 April 5, 2010 71
  72. 72. 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 April 5, 2010 72
  73. 73. 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 April 5, 2010 73
  74. 74. 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 April 5, 2010 74
  75. 75. 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 April 5, 2010 75
  76. 76. 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 April 5, 2010 76

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