HCLT Whitepaper: IT Outsourcing Transformation

IT Outsourcing Transformation
Demand of the time

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IT Outsourcing Transformation - Demand of the time

Overview

IT Services have been an in-house function for most of organizations
across the globe a decade ago. With rapid growth in new technologies
and expansion of customer base, organizations were unable to adapt to
changes relying solely on their in-house IT teams. This gave rise to
external IT service providers and proliferation of multiple engagement
models.
In-House IT Team – Organizations were using in-house IT
teams to manage the IT work.
Co-Sourcing Model - Organizations started using consultants
from the service providers to manage the work along with the In-
house IT team. Service provider‘s consultants were managed by
the IT manager.
Staff Augmentation (T&M) Model – Organizations use IT
service providers to complement the in-house IT teams in
execution of projects and pricing model was based on the effort
put by the consultant.
Fixed Price Model – Fixed price model is similar to Staff
Augmentation model in terms of tasks being outsourced to the
service provider. Pricing model is different from Staff
Augmentation. In Fixed price model, cost of service is measured
in terms of quantity of deliverables and overall program is
managed by the organization.
Managed Services Model – In Managed services engagement
model, the service provider is responsible for end-to-end
responsibility to deliver a service which was being delivered or
managed by the organization‘s in-house IT department. Pricing
model is outcome based as compared to activity based in the
earlier models.

Figure 1: In-House IT Vs Co-Sourcing Vs Managed

Definition

A managed service is the practice of transferring day-to-day
management and operations responsibility to a third party service
© 2011, HCL Technologies. Reproduction Prohibited. This document is protected under Copyright by the Author, all rights reserved.

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provider, as a strategic method for improving effectiveness and
efficiency.While the organization that owns or has direct oversight of
the entity or system being managed is referred to as the client or
customer, the person or organization that accepts and provides the
managed service is regarded as the service provider.

Concept

The service managed and delivered by a service provider under a
contracted service level agreement is generally termed as a ―Managed
Service‖. This term is used by various providers differently based on
the context of their business and the services that they provide. The
service provider takes complete management responsibility to deliver a
service that was traditionally performed by the internal staff or by the
service providers in either T&M or Fixed price model. Managed
services are definitely not a one-size-fits-all concept. They have to be
customized based on the unique needs of the organization and the
service provider‘s portfolio of services.

In a managed services scenario the customer organization compensates
the service provider for the services that it provides and not for the
components that constitute the service. The customer organization is
not required to plan, design, manage, and deliver the services in a
managed services scenario, as all these activities that are related to
service delivery and operations management are the responsibility of
the service provider. While working with an organization that has a
highly matured managed services setup the customer is required to
only manage, monitor and evaluate the overall service provider
performance.

Scope

The diagram shown below depicts the scope of the Managed services
Portfolio starting from mere Team augmentation to the level of
complete outsourcing of all Assets (Hosting & IT), planning, designing
through an SLA based end-to-end service management. The scope in
Model-4 gets extended up to managing other service providers for a
defined scope of work. It also includes driving RFP and selecting the
final service provider to provide the service.

Figure 2: Levels of Outsourcing


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The Needs

There are several drivers for a managed services set up depending on
the organization, the industry it is operating in, the
applications/systems that it uses, service provider penetration, and the
IT industry outlook. They range from reducing delivery risk to
leveraging the service provider‘s capabilities for service delivery.
CIOs are facing the challenges of –
IT Managers spending time in micro management of individual
projects
Managing financial pressure of high cost of operation and
inadequate year-on-year improvement
Fierce competition
Handling all business and technology risk
CTO, SMEs and IT Managers spending the precious time in
finding the ways of application modernization and lack of support
from the service provider
Having roadblocks in adopting mission critical technology and
going for business transformation
Inadequate Value addition by the service providers.
Lack of transparency from the service provider.

Service Providers also face the problem of –
Lack of Visibility
Lack of Ownership
Non involvement in planning activity and execution as per the
plan
No focus on the productivity improvement and competency
enhancement.
Inadequate opportunity of moving up in value chain during the
engagement.

These challenges are mainly because of the reasons illustrated below.
Multi Vendor Scenario – Customers are working with multiple
service providers and tracking each and every service provider is a
cumbersome task.

While working in Co-souring model, service provider lacks in
demonstrating the -

Accountability – Customer is accountable for any issue even if
services are offered by the service providers.
Capability enhancement – Service Provider‘s consultant sticks to a
technology and the application without any capability enhancement in
technology or business applications.
Productivity Improvement – Supplier‘s consultant does not work in
the line of productivity improvement to deliver more for less.
Innovation – There is a lack of innovation by the service provider‘s
consultants when they don‘t get opportunity to define, execute, deliver
and measure their performance.
Scalability – Scalability becomes an issues when planning is done


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by somebody and execution by somebody else. In case of In-house IT
team also, scalability is an issue to address.
Visibility – Service provider does not have the visibility of the
complete landscape and it impacts the performance of service
provider.
Partnership – Service provider does not work in partnership mode to
bring maturity into the business.

Outsourcing in Managed Services - Benefits

IT Industry has seen tremendous benefits by transforming the
engagements into Managed Services. In a matured managed services
engagement model, customer gets benefits not only in making a better
strategy for the coming years but also gets cost effective and quality
services from the service provider in partnership mode. Few key
benefits are -
Risk, Responsibility and Rewards sharing by the trusted partners
Predictable costing
Innovative solution framework
SLA Based Delivery - Driving Efficiency through Service Level
Management
Customer FTEs are ―freed up‖ to take-up other important
activities
Clearly stated, measurable outcomes – Accountability is built into
the model so that roles and responsibilities are strictly defined and
ambiguity eliminated wherever possible with Quantitative metrics
and milestones.
Consistent High Quality Delivery
Continuous improvement - Simple staff augmentation does not
provide the incentive for process improvement. The managed
outcome model, by comparison, encourages the provider to
exploit savings opportunities through shared knowledge of best
process practices, standardization, and application life-cycle
improvements
Development of Reusable components
Access to Experts, Enterprise Tools and World-Class
Methodologies
Improved efficiency and productivity
Knowledge Retention
Reduced Total Cost of Operations
Improved Customer Satisfaction

Transformation to Managed Services

Purpose

This document provides a methodology for transforming staff
augmentation model to managed services model. It contains detailed
process for identifying and prioritizing the applications / projects /
services for managed services model and then how to start the


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managed services engagement. Prioritization is done based on the
weight assigned against numerous parameters. The methodology
explains the following–
Facilitates the service provider to develop and submit the business
case.
Helps the customer in defining the road map for transitioning to
Managed Services Model.
How to define and establish Service Level Agreements for
different types of services.

Embracing Managed Services Model will benefit the customer in terms
of cost optimization, process maturity and improved quality.
Customers get all the advantages of a matured outsourcing model in
managed services mode.

Approach towards Managed Services Model

Managed Services Framework is typically designed with the following
key objectives-
Enable transition to Managed Services in a phased manner
Provide a standardized service model
Reduce client effort‘s on operational management
Extend benefits from economies of scale
Will provide IT Managers necessary job aids, guidelines, templates
and checklists to enable transition into the framework
The process any established service provider would like to follow the
approach is represented below (while working with Customer
counterparts)-
Prepare Application Services Catalog
 Prepare exhaustive list of services provided for each
application
 Categorize these services for each application in to various
application management services (AMS) category
 Prepare a volume baseline per application per service
Categorize Applications
 Applications are categorized (Platinum, Gold, Silver etc) based
on the business criticality
Document As-Is Processes for each of the AMS Categories in the
following lines
 Incident Management , Problem Management,
 Change Management
 Service Request Management
 Configuration, Release and Availability Management
Collect Service Level Requirements based on business criticality
Define SLAs based on Service Level Requirements


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Based on the analysis, a roadmap is prepared to transition services
from the existing setup to service provider‘s Managed Services model.

Figure 3: Managed IT Operations Services

The Elements

There is a need for establishing strong practices both on the customer
and service provider front to move into a managed services setup.
Moving into this setup calls for putting in place a framework that
governs the organization and its service providers and certain
operational practices that need to be followed by them.

Both these would include financial aspects, service level agreements
and a cataloguing model, among others. Generally the following are
key components of a managed services framework -

1. Service Cataloguing toolkit – Contains the types of services
offered, detailed description of the services offered, customizations,
scope, service windows, support specifications, DR specifications,
requisition procedures and related dynamics.

2. Service Level Agreement Framework – A framework that is
aimed at managing the services being offered to the customer with
targets defined for performance, quality, rewards and penalty
mechanisms, review and monitoring guidelines.

3. Pricing and costing model – The financial framework used for the
provision of the services that includes the budgeting model, costing
and pricing mechanisms, chargeback mechanism and other accounting
procedures.

4. Governance Framework – The Managed services governance
framework talks of the structure, policies, practices that are necessary
for the governance of the managed services setup. It also includes
establishment of forums/focus groups around specific areas with
representation from key stakeholders from Business & IT.


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5. Strategic Uptake Planning – Is aligned to the Customer strategy
as a whole and creates higher value for business.

6. Optimized Demand Management – Helps in minimizing the
execution cycle time, standardizes the processes to ensure consistent
customer experience.

7. Quality Delivery through standardized deliverables, engagement
success and best practices cascaded across the Managed Service.

8. Optimized Service support with better resource mobilization,
higher offshore % and improved governance, scoping & reviews.

Additional elements could form a part of the managed services
framework based on the Project requirements. However, there are
other IT operations and management practices like support processes,
and documentation that any organization must establish in order to
move into a managed services framework.

Strategy

The approach starts with the agreement on scope of services targeted
in managed services model and Identification of opportunities for
managed services within the customer‘s organization.
Prioritization of candidates for Managed Services:
Application prioritization is one of the important steps in moving the
projects from staff augmentation to Managed Services Model.
Prioritization of projects, tasks and activities must be carried out using
a set of parameters.

Parameters to prioritize the candidates

Desired outcome of the
Parameter Description Parameter for Faster
transformation

Where ever there is scope for huge financial,
Business Criticality regulatory impacts, it is better to transition those Low
services at a later stage after detailed due diligence.
Having senior management‘s commitment with
Management Support High
some business representation is critical.
A clear understanding of the risks and mitigation
plans to reduce exposure to them is necessary. Risk
areas to be considered are
Regulatory & legal risks
Risks Services that could impact the business in Medium
terms of revenue
Risks that can cause instability in the IT
organization
Critical proprietary information and rights
Number of changes to the application functionality
Application Stability High
/ architecture
Identification of the applications / services that can
ROI Medium
provide high yield / ROI.
Increase in the productivity and the need for
Productivity Low
reduction in the cycle time
Services where there is a scope for performance
Performance
and quality improvement are best candidates for Medium
improvement potential
transitioning into managed services.


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Desired outcome of the
Parameter Description Parameter for Faster
transformation

Services where there is skills shortage or lack of
Technical Expertise Low
technological expertise in customer organization
Many applications and Infrastructure related work
requires documentation. This technical or non-
Documentation Medium
technical documentation is necessary when a third
party is managing the delivery.
Services where there is a level of process maturity
Process maturity with clear roles and responsibilities, standardized High
processes and procedures
Having the capabilities within the client
Organizational
organization for managing service delivery in the High
Readiness
new setup.
For transitioning into a managed services model,
one of the most critical element is having authority
Level of Authorization High
for the SPOC from customer side for the services,
associated applications and infrastructure
The candidate services / applications are
Application Stability High
reasonably stable.
Complexity of the applications being transitioned
Complexity into managed services mode plays a major role on Low
the tenure of the transformation.

The below table has parameters related to service provider‘s
capabilities and these can be used by CIOs to evaluate a service
provider for any particular piece of work to be outsourced in managed
services model.

Service providers with proven capabilities that can be leveraged High
Methodologies, further is extremely important, by not only taking over support but
practices, processes also create value by leveraging their proprietary methodologies,
practices and processes.
Ability to manage The service provider should have a set up to meet the demand for Medium
demand Managed Service Model.
Domain & High
Strong expertise in domain and technology areas and the expertise in
Technical
using multiple technologies for a business objective.
Competency
Service Providers with proven expertise in delivering the projects High
MSM Expertise
with MSM

The above parameters will help in deriving the Managed Service Index
which will indicate how soon the service / application / project can be
transformed to Managed Serviced Mode. Implementing this model
across all services / applications / projects shall derive the Managed
Services Transition Roadmap.

Design

The main goals and objectives of Design are to:

Design services to meet agreed business outcomes
Design processes to support the service lifecycle
Identify and manage risks
Design secure and resilient IT infrastructures, environments,
applications and data/information resources and capability
Design measurement methods and metrics
Produce and maintain plans, processes, policies, standards and
architecture.


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Frameworks and documents to support the design of quality IT
solutions
Develop skills and capability within IT
Contribute to the overall improvement in IT service quality.

This phase involves creating IT operations service catalogue, mapping
business and IT processes through a contract managed service
business and operational solution. Outcome of this phase is a clearly
defined business case for moving towards managed services. This
phase comprising of two sub phases viz. Due Diligence, SLA
Framework and Business Case preparation.

Plan / Solution

Inputs gathered during the due diligence phase are considered for
defining plan for delivering the agreed services to customer. This plan
can include the technology solutions, process solutions, a high level
schedule and effort to deliver predefined scope of services. This scope
of work along with SLAs defined below will be the key inputs for
preparing the business case.

Service Level Agreements (SLAs) – Life cycle

This section explains the process steps involved in managing the
Service Level Agreements.

Define SLAs — this process covers the work of drafting and
refining SLAs, ensuring they meet the customer requirements and
gaining agreement from all the parties involved.
Implement the SLA — once all parties have agreed, the SLA is
published, a start date determined and the affected operational
teams notified.
Measure SLA performance and report results.
Refine — assess the effectiveness of the service, locate where the
gaps or changes are occurred and execute the SLA definition
process to adjust the SLA.

Managed Services Business Case

Detailed Managed Services business case will be prepared and
submitted to the customer. The proposal will focus on the below
items to deliver the services.
 Scope of Work
 Assumptions and Dependencies
 Methodology and Approach
 Proposed Technical Solution for new projects
 Service Level Agreements
 ROI
 Time lines & Commercials


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 Governance Model (Engagement Model, Project Organization
Structure, Project Management Processes, Project Progress
Tracking & Communication, Risk Management, Change
Management, Escalation Management)
 Responsibility Matrix
 Case Studies
Finally, Signed Managed Services contract is an outcome of
Service design phase

Transition and Service Delivery

The transition phase involves taking over the management and
operational responsibility of the given scope of work. This is executed
by leveraging a program management framework and
working closely with the customer to assess, document and validate the
steps that are applicable to the defined scope.
Transition has below steps and that should be executed with a detailed
checklist and toll gate review at regular intervals.

Due Diligence – To understand the scope of work
Transition Planning – To make the plan and schedule for the
actual transition. It also defines the team structure and the mode
of training.
Transition – Actual knowledge acquisition happens as per the
agreed transition plan between different stakeholders.
Shadow Support – The new service provider provides the
secondary support where as the incumbent service provider or
internal staff contributes for the primary support.
Reverse Shadow Support – The new service provider provides
the primary support and the incumbent service provider or
internal staff provides help to the new service provider in
execution.
Steady State – The new service provider takes the complete
charge of service delivery.
Optimization stage – This is the continuous improvement
activity and the service provider shows the continuous
productivity improvement throughout the engagement.

Managed Services Framework

The key elements that frame the managed services model include
Delivery Framework, Governance Model, SLA framework and
Processes & Tools

Delivery Framework that aligns with the service scope and
leverages on application development / support needs and skill
requirements. The delivery model aims to provide the client
benefits from improved quality of service, economies of scale and
visibility


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Governance Model ensures that engagement related decisions
varying in criticality, urgency and financial impacts are
appropriately addressed through a multi layered governance
mechanism operating at strategic, tactical and operational levels
Service Level Agreements are defined for each of the services
identified and measured during the execution of the project. SLAs
are reviewed on a periodic basis and necessary changes are
incorporated in consultation with customer.
Process and Tools ensures that the delivery teams have
appropriate capabilities to provide the services defined. An
engagement specific policy and procedures manuals supported by
service delivery plans is provided to internal stake holders to
clearly define the approach for service delivery. A typical
established service provider uses a combination of client provided
request handling tools and 3rd party tools to deliver services.

Program Management

The best of class Framework is implemented with the Program and
Project Management methodologies at the organization level, and
practice specific engineering life cycle methodologies at the customer
engagement level.

Figure 4: Program and Project Management

Every program sets out their vision and goals based on the stakeholder
expectations, Business Unit level KRAs and customer-specific business
commitments. This Program Vision and Targets govern Project
Initiation and Planning activities, which include Project-level Measures
and Goals setting. Similarly, the Project-level performance acts as a
feedback loop in monitoring and stabilizing program execution

A Program is defined as a ―group of projects managed using the
established Delivery Framework to deliver Software Products and
Services, based on customer requirements, to leverage Benefits and
Controls, not available from managing them individually‖.


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The Program Management methodology provides for processes
required to plan, track and manage programs / customer engagements
from a strategic perspective

Figure 5: Program and Project Management Framework

Project Management

Figure 6: Project Management - Delivering Right First Time

A Project is a value creating business executed in a defined time period
which enables delivery of services to the end consumers.
Projects provide for further breaking of the scope of engagement /
program (strategic business needs of the customer) in to manageable
work packets (Development, Maintenance, support, etc.) for effective
execution and delivery.

The phases of project management include – Initiation, Planning,
Execution (Tracking & Monitoring, Delivery & Deployment) and
Closure. The approach following for delivering project level output
right first time is depicted below:

Practice / engineering methodologies for
Solution / Delivery

Software Engineering Life Cycle / practice specific methodologies


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should have been defined to direct the execution and delivery of
solutions and services across disparate technologies. Detailed
methodologies and procedures must be available with any service
provider‘s quality process. The relevant portion of the same will be
shared with the customer during the engagement kick off.

Delivery Structure

 Delivery team(s) collaborate with the representatives in the
customer organization in the context of project delivery
 Customer Management Team collaborates with the customer at an
engagement level, in providing a comprehensive picture of all
delivery.
 Delivery Support by Quality, Competency Solutions, HR, KM and
others

Figure 7: Delivery Structure

Governance Model
Service provider should have a comprehensive governance structure
and process in place. The key activities in planning for the governance
structure and process include-

 Establishing a review plan for critical milestones, deliverables and
periodic progress
 Defining a detailed communication plan – identify reporting
requirements and the various stakeholders who need to be
communicated. Determine the frequency of communication and
responsibility and,
 Defining the escalation matrix for issue resolution

At program level, every program manager captures communication
and review plans pertaining to their programs in any Program
Management Portal. The escalation matrix applicable for issue
resolution will also be updated in the portal. Program Managers have a
provision to upload plans pertaining to document management and
knowledge management as a part of the overall program planning
phase. Effective program governance is a cornerstone for successful
change management and incident / exception management. The
change register and an incident / exception register, is used to monitor
changes / incidents / exceptions impacting the program.


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Program Managers leverages on the above features in the portal, in
defining a comprehensive governance plan for their programs. This
would facilitate the effective monitoring of the governance mechanism
during the program execution phase, and help program managers in
steering their programs towards success. The typical Governance
model for followed in HCL is depicted below-

Governance Forum Participants Inputs Outputs

 Customer’s Project
Sponsor
STEERING Steering Committee  Customer’s Senior
 Project Highlights
 Executive Commitments

COMMITTEE
Review Key Performance
Meeting Management
Indicators
 Issue Resolutions
(Quarterly)  HCL’s Head of Delivery  Strategic Directions
(Executive Management)  HCL’s Engagement
 Escalated Issues
Director

ENGAGEMENT  Customer’s Program 

Progress Reports

Engagement Review Manager Escalated Issues Issue Resolution
GROUP  Customer’s Project  Directions from Steering  Project Plan realignment
Meeting Manager Committee  Issue Escalation
(Relationship (Monthly)  HCL’s Program Manager  Risk Analysis  Resource Requisition
Management)  HCL’s Account Manager  Metrics

 Customer’s Project
 Project Status
Manager  Issue Escalation
DELIVERY GROUP Delivery Meeting  Customer’s SMEs
 Metrics
 Revised Plan
 Directions From
(Project Management) (Weekly)  HCL’s Project Manager  Metrics
Engagement Group
 HCL Technical/Module/  Risks
 Current issues
Test/Project Leads

MEETING SCHEDULE REPORTS SCHEDULE

Steering Committee Once every 3 Months REPORT PREPARED BY SENT TO

Weekly Status
Engagement Committee Once every Month Project Manager All Stakeholders
Report
Monthly Progress Project Manager &
Delivery Meeting Once a week Steering Committee
Report Account Manager

Figure 8: Governance Model

Indicative SLAs

In any managed services engagement, SLAs are aligned with only two
objectives – One is on time delivery and the other is bug fixing time
for resolution.
In addition to the above SLA‘s, the following table contains the sample
SLAs that can be followed for the engagement in the Managed Service
Model. The actual SLAs will be discussed and mutually agreed upon
commencement of the managed services model:
Indicative SLAs for Production Support projects are given below.

Measurement
SLA Metric Formula Expected
Matrix

Time of Ticket
Severity 1 Ticket
Response Time Response minus Time 15 minutes
Response
of Ticket Assignment
Time of Ticket
Severity 2 Ticket
Response Time Response minus Time 15 minutes
Response
Time of Ticket
Severity 3 Ticket
Response Time Response minus Time 1 hour
Response
Time of Ticket
Severity 4 Ticket
Response Time Response minus Time 2 hours
Response
Time of Ticket
Severity 1 Ticket
Resolution Time Resolution minus Time 4 hours
Resolution


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Measurement
SLA Metric Formula Expected
Matrix

Time of Ticket
Severity 2 Ticket
Resolution Time Resolution minus Time 3 days
Resolution

Time of Ticket
Severity 3 Ticket
Resolution

Time of Ticket
Severity 4 Ticket
Resolution

Time within which the
Post Mortem report to
Post Mortem Incident
Time be sent to the customer 24 Hrs
Report
for Severity 1 & 2
tickets

Challenges in moving into Managed Services

Like any other scenario where there is a substantial organizational
change, transitioning into managed services also presents tough
challenges in the way of the transformation. Some of these challenges
are process related, some technological and some related to
organizational & behavioral changes. One of the most important
criteria and challenge for the customer organization is to have enough
trust on the capabilities of the service provider. Since Managed services
requires less oversight and management burden for the customer
organization, in spite of
clearing all odds, not having trust on the service provider organization
and its capabilities can undermine all efforts. Below is a list of few
prominent challenges that most organizations face in this
transformation.

Challenges & their mitigation while moving
into the Managed Services Mode:

Based on our past experience in converting the engagements into
managed services mode, we have listed the possible issues that might
develop. We have also given below the mitigation or resolution for
each of these issues in order to move the engagement to managed
services mode successfully.

S.No Challenge Resolution / Mitigation from the Service Provider

1 Dependency on Service provider will go through the training / KT during the first 6
the customer months to become the subject matter experts for the identified
SME skill/stream. This will help in minimizing the customer SME involvement
on a staggered mode and eventually the service provider‘s team will
become self dependent.

2 Gaining In order to get the confidence, the movement will be done in a staggered
Customer mode - Partially managed and eventually into a fully managed services
stakeholder mode. This will also help in minimizing the risk for the business.
confidence for
moving into
Managed
Services Model


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S.No Challenge Resolution / Mitigation from the Service Provider
3 Lack of Upon conversion to partially managed / fully managed, service providers
transparency follow the defined communication plan to share the project progress,
from Service issues/concerns, performance SLAs and metrics with customer. This will
provider be planned at multiple levels. Service provider‘s onsite co-coordinator will
be interfacing between onsite, offshore and customer to minimize any
gaps.
4 Lack of The SLA based engagement with performance incentives & credits to
Accountability ensure required accountability from the service provider.
from Service
provider

5 Handling Service provider team will be supported by the internal Technical
architectural Architecture Group and competency groups. These groups provide the
changes technical guidance and also perform technical & architectural reviews to
ensure that the deliverables meet the standards.

7 Knowledge Service provider should have a dedicated Knowledge Management portal
Retention and framework for customer engagement. The framework enables the
service provider to capture, retrieve and re-use the documented
knowledge and tacit knowledge.

8 Lack of Customer will continue to manage the engagement by way of the
engagement following: - (a) Prioritization of projects (b) Approving milestones (c)
oversight by the Estimation revalidation and approvals (d) SLA based performance
customer monitoring and provision of incentives & credits (e) Toll gate reviews and
signoffs for the milestone based deliverables.

9 Complaint with (a) Before migrating to the Managed Services Model, Service provider
the service would have worked with Customer for nearly 24 months time in project
provider‘s mode. This is a good timeframe for any large application to get the
SDLC required Knowledge on the service provider‘s SDLC process followed by
processes Customer.
(b) In addition to this, before moving to the Managed services model, a
charter will be prepared which describes the process to be adopted.
Service provider should be open to follow the process prescribed by the
customer, or service provider can suggest its own or a combination of
both. In any case, the process will be mutually agreed and implemented.
10 Organizational By moving into managed services model, Customer managers will be freed
change from the routine operational, technical and resource related matters. This
management and will enable them to have more bandwidth for more value added services as
people well as taking up some of the high end work. This will allow required
communication acceptance from the customer staff. It is also important to provide the
direction of the managed services model from the senior leaders of the
organization for better and faster implementation.
11 Business By outsourcing the work in managed services, customer has very little
Continuity Plan control in day to day operations. In this case, service provider needs to
have a disaster recovery plan to run the business as usual in case of any
disruption. This should be tested and audited in regular interval.

End Note

Defining a long term vision and the roadmap for its execution are the
utmost priorities for any CIO. This can be achieved only if CIOs and
IT managers outsource the IT work to a service provider in managed
services model. This gives more bandwidth to work on strategic
things. All operational work to run the business is outsourced to a
service provider with agreed service level agreement. It also reduces
the total cost of ownership and annual budget can be used for
transformation of application to meet the business and market
demands. It also brings improved customer delight index.


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References

http://en.wikipedia.org/wiki/Managed_services

http://www.cio-weblog.com

http://technologyoutsourcingblog.com

http://managedservicesblueprint.com

About the Author

Praveen Sinha is part of Mainframe Solution CoE team as ADMS
consultant and has 15 years of experience in various areas of
Mainframe. In the past, he has worked in several large engagements
and converted Staff augmentation or Semi-Managed Services
engagement to Managed Service Model successfully. He has also
contributed in starting an engagement in managed services model
for various Transformation, Development, Maintenance and
Support projects across various technologies.


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ABOUT HCL

HCL Technologies

HCL Technologies is a leading global IT services company, working
with clients in the areas that impact and redefine the core of their
businesses. Since its inception into the global landscape after its IPO in
1999, HCL focuses on ‗transformational outsourcing‘, underlined by
innovation and value creation, and offers an integrated portfolio of
services including software led IT solutions, remote infrastructure
management, engineering and R&D services and BPO. HCL leverages
its extensive global offshore infrastructure and network of offices in 31
countries to provide holistic, multi-service delivery in key industry
verticals including Financial Services, Manufacturing, Consumer
Services, Public Services and Healthcare. HCL takes pride in its
philosophy of ‗Employees First‘ which empowers our 72,267
transformers to create real value for customers. HCL Technologies,
along with its subsidiaries, had consolidated revenues of US$ 3.1
billion (Rs. 14,101 crores), as on 31st December 2010

About HCL Enterprise

HCL is a $5.7 billion leading global technology and IT enterprise
comprising two companies listed in India - HCL Technologies and
HCL Infosystems. Founded in 1976, HCL is one of India's original IT
garage start-ups. A pioneer of modern computing, HCL is a global
transformational enterprise today. Its range of offerings includes
product engineering, custom & package applications, BPO, IT
infrastructure services, IT hardware, systems integration, and
distribution of information and communications technology (ICT)
products across a wide range of focused industry verticals. The HCL
team consists of over 79,000 professionals of diverse nationalities, who
operate from 31 countries including over 500 points of presence in
India. HCL has partnerships with several leading Global 1000 firms,
including leading IT and Technology firms. For more information,
please visit www.hcl.com


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