1. Joann Martin, PMP, COP
January 25, 2010
Selecting the Right Partners
to Optimize Outsourcing with a
Thorough RFP Process

2. 2
2
“A good alliance is like a unicorn. Everybody had
heard of them, but few have actually seen them.”
Tom Hooks Motorola

3. Process
1. Team
2. Requirement – Business Case
3. Landscape
4. Selection Criteria – Evaluation Scorecard
5. RF?
6. Site Visit/Security Audit
7. Customer Interviews
8. Negotiate
9. Contract/MSA/SOW - Award
10.Transition
11.Manage

4. Team
 Business Stakeholder(s)
 Finance
 Procurement
 Legal
 IT
 HR
 Project Manager
 Transition Managers
 Consultant

6.  All in Costs
 Rate (FTE/Transaction/Hour)
 Quality
 Data – Telecom/IP
 Project Manager
 One time costs
 Transition
 IT
 Ongoing costs
 Travel
 Management
 Risk/Compliance Audit/Controls
Why? Why? Why?

7.  WWW
 Networking
 Books/Magazines
 Hoovers
 D&B
 Fidelity
 BBB
 Industry
◦ BlackBook
◦ IAOP
◦ Forrester
◦ Gartner
Landscape
 Public
 Private
 Size
 Finances
 Time in business
 Diversity – Minority
 Locations
 Done business
before
 Customers

8. Performance Criteria
Financial
What does the vendors balance sheet look like compared to others?
Its trends?
What part of the vendors portfolio will we be
Technology
Has technology investment been yearly?
Where are they investing?
Does it match our strategy?
Process
How do they measure quality? Is it industry standard?
Do they measure outcomes? Cycle time?
Does the measurement match our goals?
Employees
What is their attrition? Hiring practices?
Do they have good talent management plans?
Is there an adequate labor pool available geographically?
Organization
Is there a global account rep?
Are there global barriers?
Do they have structural alignment with us?
Selection Criteria

9. Key Decision Criteria Weights
Architectural - Technology 15
Operations 10
SLAs - KPI 10
Quality 10
Implementation 10
Risk Mitigation 10
Pricing 30
Value Add 5
Overall 100
Key Decision Criteria Weights
Costs 25
Program Management/ Continuous
Improvement
15
Hiring/Training/Retention Practices 10
Customer Retention 5
Similar Experience 10
Capability/ Technology 10
Transition 15
Personnel 10
Overall 100
Selection Criteria

10. RF?
 Request for Information
 Request for Quote
 Request for Proposal
 Request for description/specification and pricing
 Considers all terms of the potential contract
 Looking for the ‘best solution’
 Involves an evaluation team
 More than the lowest price
 Further negotiations will happen as more specifications are
discussed

11.  Instructions to Vendor
◦ Administrative information
◦ Dates/Media
◦ Communications
◦ Legal – Compliances – MSA Draft
 Overview of Requirements
◦ Details
◦ Current Process
◦ Technology/systems/tools
◦ Risk – DR/BCP
◦ Change
◦ Strategy short term/mid term/long term
Organization of RFP
“Personal Ad”

12.  Vendor Response Section
◦ Solution Fit - Timing
◦ Architecture/Technology
◦ Team/HR/Talent
◦ Process – Change Management/Project
Management/Relationship/Transition
◦ Customer Satisfaction
◦ DR/BCP
◦ Value Add
◦ Lessons Learned
◦ Financials/Disputes
◦ Certifications
◦ References
◦ Pricing and methodology
Organization of RFP
TRANSPARANCY AND FIT

13. .
 Short List
 Go to the location your work will be done
 Establish the objectives for due diligence visits
◦ Review the visit process – Roles and accountabilities
 Collect and communicate questions
 Interview hands on team, supporting team
(quality/site management)
 Observe other customer “areas”
 Security semi-audit
 Review tools - processes
 Document observations and responses during the
visit
 Reflect on comparisons quickly
Discrepancies or Enforcerers

14. .
 Short List
 Keep in 30 minutes or less
 Establish the objectives
◦ Is the work the same? Location?
◦ Why did they chose vendor
◦ What Worked, What didn’t
◦ What would you do different
◦ How long have they used vendor – grown or shrunk
 Collect and communicate questions
 Document observations and responses right after
the call
 Offer the same
Discrepancies or Enforcerers

15. Win - Win
 Short List
 Goal
• Obtain Vendor’s Best Offer
• Achieve your interests and goals
• Obtain commitment from Decision-makers
 Team Negotiations
• Greater ability to negotiate all issues, variety of technical expertise
• Team Members, Presenter, Tie Breaker, Listener
 Complete a “Memo Of Understanding”
• Organize negotiations session, Assign roles and responsibilities
• Complete review of issues, Resolve

16.  Fact Based
• Information learned from process
• Includes MSA exceptions
• Historic Performance, Industry Trends - What Else You Know,
Previous Negotiations
 What are you negotiating
◦ Services – Quality, SLA, Relationship/Reporting, DR/BCP
◦ Costs - Cost Plus, Unit Pricing, Fixed Price, Transaction, Results
◦ Risk – Strategic/Operational/Financial
 Term
 Flexible, Incentive Based, Gain-Sharing, Achievement Bonuses
 Discussion Order
◦ Large Business Items – Less confrontational
◦ Solution detail items
◦ How much will it cost
◦ Closure – value add, additional opportunity
All in prior to contract

17. Contract
 Starts with signed MOU
 Chance for attorneys to review
 Review MSA issues
 Structure
 MSA based globally
 SOW based on types of body of work
 Scorecards – changed monthly
 Change Requests
Should be just an exercise

18. Transition
• Built on communication and exchange to date
• Official start of interface between you and your new partner
• Official agreement on volumes
• Ramp plans
• It build, Risk and DR/BCP
• Forecast of volumes for ramp-up through production.
• Communication plans
• HR plans
• Governance plan
• Test, pilot, and conversion plans
Not exactly a honeymoon

19. Executives
Account Owners
Project Level
Transition to Manage – Stakeholder Alignment
The Trust Triangle
T
i
m
e
Relationship Management

20. Manage - GOVERNANCE
 Establish accountability and alignment
 Verification of delivery of services within budget, time,
and quality
 Manage ongoing expectations
 Collaborate to meet ever changing business needs
 Manage Change, Escalation, and RISK

21. Manage – Best Practices
GOVERNANCE - GOVERNANCE
• Strategic responsibility at the top
• Multilevel organizational links
• Regular meetings at each level
• Weekly ops
• Monthly project
• Quarterly business
• Semi or annual strategic
• Data driven - Scorecard used for results
• Defined escalation process
• Defined change management process

22. Manage – Define Success
 Which metrics are more relevant to your business
 Tangible objective
 Leading Indicators
 End Value or current activity
 Manage end to end
 Process Improvements
 Compete in the future
 Purpose of Metrics
 Recognize trends
 Motivate behaviors
 Prioritize resources
 Allow benchmarking
 Compensation
 Alignment
 Data Driven Communications

23. Get past the dollar and cents, you are in this for
the long run