This document outlines a structured approach to implementing outsourcing from both the service provider and client organization perspectives, with a focus on cloud computing. It describes four phases of an outsourcing relationship - initiation, delivery, completion, and ongoing management. Key capabilities for each phase are also identified, such as contracting, service design, performance management, and technology management. The document provides examples of activities within each phase and capability as well as lessons learned from common outsourcing problems. The overall approach is presented as a framework to help both service providers and clients successfully establish and manage outsourcing relationships.
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. Agenda
• Introduction
• Outsourcing for Service Providers
• Outsourcing for End-User Organisations
April 5, 2010 3
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. Types of Outsourcing and Types of Cloud-Based
Services
• 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 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)
April 5, 2010 6
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. 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. 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. 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. 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. Sample Service Transfer Plan – Outsourcing Service
Provider
• 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. Sample Service Transfer Plan – Outsourcing
Organisation
• 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. 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. 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. 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. 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. Outsourcing/Managed Services Does Have
Advantages
• 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. 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. 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
22. Phases of Outsourcing Relationship
Ongoing
Initiation Delivery Completion
April 5, 2010 22
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. 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. 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. 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. 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. Key Capabilities Within Outsourcing Lifecycle
People Performance Relationship Technology
Management Management Management Management
Knowledge Threat
Management Ongoing Management
Initiation Delivery Completion
Service Design
Service Service Service
Contracting and
Transfer Delivery Transfer
Deployment
April 5, 2010 28
29. Key Capabilities and Constituent Practices
Outsourcing
Capabilities and
Skills
Initiation/
Delivery Ongoing
Completion
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. 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. 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. Key Issues For Successful Outsourcing
1. Establishing and maintaining trust with stakeholders
2. Managing stakeholder expectations
3. Translating implicit and explicit needs into defined requirements with agreed-
upon levels of quality
4. Establishing well-defined contracts with stakeholders, including clients, suppliers
and partners
5. Reviewing service design and deployment to ensure adequate coverage of the
requirements
6. Ensuring the effectiveness of interactions with stakeholders
7. Managing supplier and partner relationships to ensure that commitments are
met
8. Ensuring compliance with statutory and regulatory requirements
9. Managing clients’ security
10. Managing cultural differences between stakeholders
11. Monitoring and controlling activities to consistently meet the service delivery
commitments
April 5, 2010 32
33. Key Issues For Successful Outsourcing
12. Monitoring and managing clients’ and end-users’ satisfaction
13. Building and maintaining the competencies that enable personnel to effectively
perform their roles and responsibilities
14. Managing employee satisfaction, motivation and retention
15. Establishing and maintaining an effective work environment
16. Maintaining a competitive advantage
17. Innovating, building flexibility and increasing responsiveness to meet unique
and evolving client requirements
18. Managing rapid technological shifts and maintaining the availability, reliability,
accessibility and security of technology
19. Capturing and using knowledge
20. Smoothly transferring services and resources
21. Maintaining continuity of the service delivery
22. Capturing and transferring knowledge gained to the client during contract
completion
23. Measuring and analysing the reasons for termination, to prevent reoccurrence
April 5, 2010 33
34. Issue 1 - Establishing And Maintaining Trust With
Stakeholders
• 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. 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. Issue 3 - 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
− 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. Issue 4 - Establishing Well-Defined Contracts With
Stakeholders, 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. Issue 5 - Reviewing Service Design And Deployment
To 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. Issue 6 - Ensuring The Effectiveness Of Interactions
With 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. Issue 7 - Managing Supplier And Partner
Relationships 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. Issue 8 - Ensuring Compliance With Statutory And
Regulatory 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. 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. Issue 10 - Managing Cultural Differences Between
Stakeholders
• 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. Issue 11 - Monitoring And Controlling Activities To
Consistently 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. Issue 12 - Monitoring And Managing Clients’ And
End-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. Issue 13 - Building And Maintaining The Competencies That
Enable Personnel To Effectively Perform Their Roles And
Responsibilities
• 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. 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. Issue 15 - Establishing And Maintaining An Effective
Work 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. 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. Issue 17 - Innovating, Building Flexibility and Increasing
Responsiveness To Meet Unique And Evolving Client
Requirements
• 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. Issue 18 - Managing Rapid Technological Shifts And
Maintaining The Availability, Reliability, Accessibility And
Security 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. 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. Issue 20 - Smoothly Transferring Services And
Resources
• 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. Issue 21 - Maintaining Continuity Of The Service
Delivery
• 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. Issue 22 - Capturing And Transferring Knowledge
Gained 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. Issue 23 - Measuring And Analysing The Reasons for
Termination 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. Key Capabilities and Constituent Practices
Outsourcing
Capabilities and
Skills
Initiation/
Delivery Ongoing
Completion
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. 1 Service Transfer - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Delivery Ongoing
Completion
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. 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. 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. 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. 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. 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. 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. 2 Contracting - Activities
Outsourcing
Capabilities and
Skills
Initiation/
Delivery Ongoing
Completion
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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