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Most companies invest considerable money, manpower and time
to enter an outsourcing agreement, whether the outsourcing is
complete or selective, tactical or strategic, off-shore or on-shore,
IT or business process. Companies evaluate the feasibility of
outsourcing, select the right vendor(s), negotiate detailed
agreements and supporting documents, and then transition assets,
processes and, sometimes, personnel. The overall return on this
investment has generally been poor, resulting from cost overruns,
quality problems and terminated contracts. Several studies place
the success rate around fifty percent. A significant contributor
to this failure is inadequate understanding of, and lack of attention
to, outsourcing governance. One source states that not
having a formal outsourcing governance program is one of the
“top 10 major sins of outsourcing, destined to sideline
success of these [outsourcing] initiatives.”
Our experienced consultants have developed an effective, comprehensive
approach to assessing governance related to outsourcing, which
will give companies the results necessary to determine the extent
of their outsourcing governance and the impacts. Through our
solution, clients can obtain an outsourcing governance baseline
that will enable them to prioritize their efforts to produce
the greatest benefit.
Our consultants have extensive practical expertise in all phases
of the outsourcing life cycle and outsourcing governance. Additionally,
they use the COBIT (Control Objectives for Information and related
Technology) governance framework to do their analysis and assessments.
Description
TAC’s Outsourcing Governance Assessment offering provides
a phased approach that provides an assessment and analysis of
the documented and actual outsourcing governance mechanisms,
which will enable clients to:
- Understand the in-house and vendor elements of outsourcing
governance
- Determine and rank the outsourcing governance problem and
success areas
- Identify areas for reduced fees, hidden costs, and improved
service performance
- If coupled with comparative benchmarks, estimate cost reduction
potential
- Determine alternatives for problem resolution
The Outsourcing Governance Assessment offering applies to all
types of IT outsourcing, including:
- Computing services
- Data center operations
- Communication services (WAN, LAN, telephony, VoIP, IP)
- Hosted applications / application management
- Remote operations and technical support
- Call center / help desk
- Application development
- Project management
- Staff augmentation
The phased process and key deliverables are outlined below:
Phase One: Outsourcing Governance Assessment
This phase is designed to give companies a comprehensive and
objective overview of their outsourcing relationship and how
it is performing relative to the company’s expectations
and requirements.
Our outsourcing governance consultants review two dimensions
of a client’s current outsourcing governance mechanisms
against the COBIT framework: the plan, i.e., the documented
elements, and the practical, i.e., how the plan is actually
implemented. A sampling of actual experience is used as an indicator
of overall governance performance.
Key Deliverable:
Outsourcing Governance Assessment Report analyzing elements
such as:
- Roles and responsibilities
- Procurement standards, RFP
- Outsourcing contract, SOW
- Vendor management standards and charter
- Service level objectives and performance
- Vendor fees and retained costs
- IT governance standards
Phase Two: Extended Outsourcing Governance
This phase is designed to leverage the foundation established
by the Outsourcing Governance Assessment phase, and focus on
the areas of greatest need for improvement. The services may
be customized to fit your needs, but representative components
include the following:
Outsourced Service Benchmarking
This component provides a mechanism to compare the cost and
quality of the outsourced services consumed by your company
with those of peer organizations. This provides hard data for
understanding the value of the services being provided and the
opportunities for cost improvement in your outsourcing arrangement.
Outsourcing Governance Advisory Services
This component provides a means to augment the knowledge and
capabilities of your in-house staff with TAC’s knowledgeable
industry Experts. This enables your staff to leverage outsourcing
governance best practices without investing in full-time staff
in that area.
Outsourcing Governance Implementation Services
This component is a vehicle for cost-effectively improving your
company’s outsourcing governance capabilities in a timely
manner. This enables your staff to be focused on the tactical
aspects of managing the outsourcing relationship to meet your
business needs, yet also address practical governance improvements,
for example, outsourcing contract revision.
The scope and deliverables of each Extended Outsourcing Governance
component will be tailored to your unique requirements.
Target Audience
CFO, CIO, Outsourcing Program Manager, Procurement Manager —
IT and business senior managers who are responsible for developing
the IT sourcing strategy and implementing it across the enterprise.
This assessment will enable them to assess and improve their
sourcing strategies and implement ongoing measures for continuous
assessment and improvement.
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