New concepts such as cloud services and mobile technology, increased client sophistication and maturity on the outsourcing spectrum and a real concern for affordability are changing the way organizations do business, and sourcing advisors are adapting with increased flexibility to meet client requirements. This white paper puts forward an alternative, more agile approach to the traditional RFP process – the Engagement Package (EP) – whereby advisory firms can move as quickly as their clients demand. As a variation of the more widely acknowledged Request for Solution (RFS) approach, the EP allows the client to place itself on a spectrum, pinpointing the right balance between risk, agility, scope, complexity and existing service provider relationships.

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ACCELERATING THE OUTSOURCING
TRANSACTION PROCESS
The Engagement Package Approach to Service Provider Selection
By Owen Wheatley, Director

2. ACCELERATING THE OUTSOURCING TRANSACTION PROCESS ■ OWEN WHEATLEY 1
INTRODUCTION
For more than 20 years, the standard approach to contracting outsourced
services has included a comprehensive Request for Proposal (RFP) document
and a lengthy competitive selection process. The typical RFP document can be
several hundred pages of company artifacts, and the selection and
contracting process can take up to nine months. All told, the RFP approach
requires clients to allocate significant resources to bolster the sourcing
advisory team and ensure a successful outsourcing exercise.
Since organizations have been traditionally immature with respect to
sourcing, this lengthy document and detailed process have been entirely
appropriate; in many cases, it is still an organization’s best chance of
achieving the optimal sourcing outcome. But the outsourcing industry is
evolving from long-term mega-deals with a single service provider covering a
broad service scope of services to multi-transaction, multi-vendor models
with shorter duration and increased flexibility. The traditional process and
RFP document set have largely remained unchanged and can appear
excessive and costly for some organizations.
New concepts such as cloud services and mobile technology, increased client
sophistication and maturity on the outsourcing spectrum and a real concern
for affordability are changing the way organizations do business, and sourcing
advisors are adapting with increased flexibility to meet client requirements.
This white paper puts forward an alternative, more agile approach to the
traditional RFP process – the Engagement Package (EP) – whereby advisory
firms can move as quickly as their clients demand. As a variation of the more
widely acknowledged Request for Solution (RFS) approach, the EP allows the
client to place itself on a spectrum, pinpointing the right balance between
risk, agility, scope, complexity and existing service provider relationships.

3. ACCELERATING THE OUTSOURCING TRANSACTION PROCESS ■ OWEN WHEATLEY 2
WHAT DOES AN ENGAGEMENT PACKAGE LOOK LIKE?
The EP is a slimmed-down RFP document set made up of only the essential artifacts required for a comparison of options in
the selection of a preferred service provider. Although the exact contents will vary by outsourcing transaction, the EP
typically contains the following sections:
1. Introduction with terms of participation and process timelines
2. Evaluation criteria to be used by the client in assessing the service provider responses
3. Master Services Agreement/Term Sheet (if not already in place with shortlisted service providers)
4. Scope of services (the Statement of Work)
5. Service level requirements and service transition critical deliverables
6. Pricing and commercial requirements
7. Governance
THE EP PROCESS
The EP is created by tailoring schedule templates to fit the particular client situation with the emphasis on producing a lean
and effective document set in a compressed timescale. While creation of this tailored document set still requires a
significant degree of input from client subject matter experts (SMEs) and the usual approvals from senior management, the
reduced document volume has a markedly improved impact on the momentum of the sourcing program. In a challenging
macro-economic environment with most institutions seeking to reduce costs and deliver benefits as quickly as possible, a
fast and efficient process goes a long way to guarantee valuable early stakeholder support.
When the shortlisted service providers receive a completed EP document set, they are often eager to participate in what is
clearly a dynamic and collaborative process that allows them to showcase their differentiation and value-added services.
The advisory team then leads an evaluation process that is aligned to the EP structure with emphasis on the priority
elements of the transaction – solution, service levels and commercials. A lighter set of documents and a more agile
evaluation model allow for speedier selection decisions and preferred service provider recommendations, including
iterations of service provider proposals and due diligence.
One of the perceived drawbacks in the EP approach is that it can actually take more time than the RFP process at the
contract negotiations phase. A key benefit of the weighty RFP document set is that service provider response can be
relatively easily translated into a contractual style framework. The reduced number and detail of the schedules within an EP
necessitates additional thought from the client’s procurement and legal teams to ensure they have the contractual cover
they require across all aspects of the transaction. This is the main reason why the EP approach – despite being up to 30
percent shorter in duration – nevertheless requires several months to complete (see Figure 1). However, with more
experienced clients and the prevalence of multi-sourced environments, the existing framework agreements are often
already in place and can somewhat reduce the requirement for a comprehensive RFP document set.

4. ACCELERATING THE OUTSOURCING TRANSACTION PROCESS ■ OWEN WHEATLEY 3
Figure 1 – A Typical Engagement Package Timeline
WHEN MIGHT IT BE APPROPRIATE TO USE THE ENGAGEMENT PACKAGE APPROACH?
For each engagement, the sourcing advisor assesses the most appropriate transaction model to use for a particular service
scope, ranging from a traditional competitive RFP process to simply ameliorating an existing service provider contract. The
EP approach can be thought of as part-way along this spectrum.
Figure 2 – The Transaction Model Spectrum
* The exact duration of these phases depends on client resource availability, quality of data, internal governance or other client-specific factors.
5-7 weeks* 4-6 weeks*4-6 weeks*
 Agree initial supplier
shortlist(s)
 Advise suppliers of the
process and determine
their appetite
 Finalise list of EP
recipients
 Prepare the EP
including the key
sections (SOWs, SLs,
pricing structure etc)
 Release to suppliers
 Explanatory sessions with suppliers
 Suppliers prepare EP responses
 Review and evaluate supplier EP
responses
 Walkthrough sessions with suppliers
 Final scoring by stakeholders
 Recommend preferred
supplier to steering group
 Notify all suppliers
 Maintain competitive
tension as long as
possible
 Negotiate terms
 Complete legal
drafting
 Contract signature
 Prepare for service
transition
Supplier List
Selection
Prepare EP
Supplier response
& Evaluation
Contract
Negotiations*
Contract
Execution
Available time for execution
More
Less
Full RFP No Full RFP
ScopeandComplexity
Degree of Solution StandardizationLess More
More Less
1 - Traditional RFP
3 - Existing contract
restructure/improvement
2- Accelerated
RFP
(“Engagement
Package” )

5. ACCELERATING THE OUTSOURCING TRANSACTION PROCESS ■ OWEN WHEATLEY 4
Answers to the following key questions can determine the optimal approach:
 Is the scope relatively well-defined and understood by both the client and the prospective service provider(s)?
 Is the requirement for a relatively standard market offering that does not require a heavily bespoke solution?
 Does the client already have a framework agreement in place with the shortlisted service provider(s)?
 Is there a requirement to run multiple parallel transactions?
 Does the client have particular cost pressures that restrict the funding available for a sourcing program?
 Does the client have limited available resources to allocate to the sourcing process?
 Does the client have a compelling event which necessitates a compressed timeline?
If the answer to some or all of these questions is “yes,” the EP approach may be the most appropriate. Reviewing each
driver and each constraint with the client and agreeing where the potential sourcing transaction sits along that axis (as
denoted by the red circles marked “X” in Figure 3) enables the advisor and client to form a consensus as to whether the
RFP, EP or a simple contract restructure is the most appropriate model to use.
Figure 3 – Determining the most appropriate Transaction Model
THE BENEFITS OF AN EP APPROACH
The EP option has a number of significant advantages:
1. Focus – Because the EP includes only those documents which are of paramount importance, the client can
concentrate on defining the required service, service levels and commercial framework without spending time on
less significant artifacts typically featured in a traditional RFP. Such prioritization allows the client to optimize the
time spent by key resources in producing the EP materials. If the client already has a framework agreement in
place with the preferred service provider, the EP approach becomes even more attractive.
EVALUATION
= Model 1 – Traditional RFP = Model 2 – EP = Model 3 – Contract Restructure
= where the client sits on each axisX
DriversConstraints
X
X
X
X
X
X
X
Cost Management*
Scope not fully defined
Custom Solution
Less Time Pressure
Available Initial Resources**
Mature Market offering
Low satisfaction with
Incumbent
High satisfaction with
Incumbent
Immature Market Offering
Limited Initial Resources
More Time Pressure
Standard Offering
Scope fully defined
Capability Acquisition
Attributes / Characteristics
*Represents Cost Reduction, Cost Transparency and Cost Variability
**Represents whether or not there are sufficient (and sufficiently skilled) resources available to carry out the transaction

6. ACCELERATING THE OUTSOURCING TRANSACTION PROCESS ■ OWEN WHEATLEY 5
2. Collaboration – In stark contrast to the traditional RFP approach, which is often viewed as somewhat gladiatorial,
creation of an EP is only possible in circumstances where the client and service provider(s) work closely together
to refine and finesse the requirements to reach a mutually beneficial outcome. A collaborative approach not only
enables the client to get to know the delivery teams with whom they will be working post-contract, it is usually
also appreciated by the service providers who might feel constrained and even subordinated during a formal RFP
process. Additional differentiation between service providers and associated value-add will often follow.
3. Cost – A compressed timescale (typically four to five months compared with six to nine months for a traditional
RFP) has significant cost advantages for the client, both in terms of internal and external program costs. The
opportunity costs of asking client SMEs to contribute to the creation of detailed schedules within a traditional RFP
is often underestimated, so the reduced time requirement of an EP approach has even greater value.
4. Discipline – Historically, the alternative to a traditional RFP was simply to ask the service provider(s) to propose a
solution based on their experience in an attempt to reduce timescales and associated costs since no statement of
requirements was being built. In some cases, this approach can leave organizations spending more time and
money reviewing endless iterations of service provider proposals and fighting to retain control of the process.
Although the EP model compresses the end-to-end time between project inception and contract signature, it
retains the process discipline of the traditional RFP approach. By asking service providers to respond to clearly
articulated requirements, the client remains in control of both the solution and the process.
AN ALTERNATIVE APPROACH
The days of the traditional full RFP process are not over. In many cases, the complexity or magnitude of the services in
scope will demand such an all-encompassing model. But the world of IT outsourcing is changing, and the advisory
community is evolving to meet the challenges posed by increasingly sophisticated clients with ever-shrinking consultancy
budgets. The Engagement Package approach will not appeal to all organizations or be appropriate in all situations, but it
offers a proven and realistic alternative. The sourcing world is a very different place compared with the 1990s. The EP’s
time has come.

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© Copyright 2013 Information Services Group – All Rights Reserved
For further information, please contact Alex Kozlov, Director of Marketing, Americas, at alex.kozlov@isg-one.com
or +1 617 558 3377
Information Services Group (ISG) (NASDAQ: III) is a leading technology insights, market intelligence and advisory services
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public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting
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