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1B - Outsourcing - Kevin Calder & Peter Wainman

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1B - Outsourcing - Kevin Calder & Peter Wainman

  1. 1. Outsourcing IT services Title goes here How to get the gain without the pain Subtitle goes here 20 March 2013 Name Surname One Name Surname Two Kevin Calder – kevin.calder@mills-reeve.com Peter Wainman – peter.wainman@mills-reeve.com
  2. 2. Introduction to Mills & Reeve o Leading national firm o Substantial expertise in: – IT and outsourcing o Cloud and CRM – Charities and public sector – Public procurement o Advising charities on bidding where public bodies outsource their functions
  3. 3. Introduction to today’s session o Save the Lawyers – Case study – Based on a true story – Kevin Calder, Finance Director (and CIO) o Legal context o Tips and tricks
  4. 4. Scope o Outsourcing procurement: – requirements and solutions o Managing change: – adapting to the changing business needs of charities o Supply chain management: – working in multi-supplier environments o Delivery: – managing outsourcing contracts
  5. 5. Requirements and solutions o Save the Lawyers: case study part 1 – Managed services procurement including CRM – Existing system(s) not fit for purpose – Key system end of life in 3 months – Limited budget for procurement exercise – Received a brochure from WebCo CRM – Ideal solution = get the bidders to do the work
  6. 6. Requirements and solutions o Why are we talking about this? – Uncertainty over what customer is buying – Biggest cause of disputes between customers and suppliers – and of outsourcing failing o What are the issues for Save the Lawyers? – Brochure is a solution not requirements – Sales wording typically vague – Supplier knows what it can offer not what Kevin needs – Even if have requirements, how will supplier’s proposal fit into the contract?
  7. 7. Requirements and solutions o Does this really happen? – Client outsourced all IT services – specification agreed in a rush – Cost of contract changes and management time o Tips and tricks – Don’t rush in – urgency not a reason to get it wrong – extensions, interim solutions – Requirements not solutions – what you want the supplier to do for you not how it will do it – Contractual clarity – fix conflicts; consider agreeing specification; ensure clear, shared understanding of what will be delivered – Iterative development – “agile”
  8. 8. Adapting to changing business needs o Save the Lawyers: case study part 2 – Signed a managed services contract with WebCo – Save the Lawyers is merging with Barrister Benefit Fund – BBF is split into 20 regional offices, each with its own local CRM database – Clear benefits of a cloud hosting solution – Contract with WebCo CRM is specific on the platform, location and the size of the database – WebCo CRM are launching a cloud enabled version of their system, but not until 2014
  9. 9. Adapting to changing business needs o Why are we talking about this? – Change is a fact of life – charities don’t stay still and neither does technology o What are the issues for Save the Lawyers? – What does the contract say? – Uncertain cost to add BBF/additional sites – Problems interfacing with existing systems/transferring data – Uncertain timing and cost of cloud solution
  10. 10. Adapting to changing business needs o Does this really happen? – Licence, support and service levels based on metrics – Anticipated changes o Tips and tricks – Price known changes – volume and scope changes, catalogue – Avoid exclusivity – commercial incentive to deliver value in change – Build in flexibility – contract change process, recording, changes, early termination
  11. 11. Multi-supplier environment o Save the Lawyers: case study part 3 – Save the Lawyers has moved its hosting to the cloud – WebCo CRM brought forward the launch of their cloud module – Outsourced IT infrastructure provider has built the hosting platform – Project running on schedule – When testing, CRM system falls over whenever any data is imported
  12. 12. Multi-supplier environment o Why are we talking about this? – Increasingly unlikely one supplier will best meet all needs o What are the issues for Save the Lawyers? – Incompatibility between cloud platform and infrastructure – How clear is the specification – whose fault is it? – Who is responsible for fixing the problem? – Who bears the cost (Save the Lawyers and suppliers)? – Dealing with problems will cause delay
  13. 13. Multi-supplier environment o Does this really happen? – Separate application developer and infrastructure provider – Testing failures, delay, dispute about responsibility o Tips and tricks – Integrator role – charity or supplier (specialist integrator?) – Cooperation between suppliers – working together, sharing information, OLAs – Contractual clarity – scope, testing, roles
  14. 14. Managing an outsourcing contract o Save the Lawyers: case study part 4 – We fixed the data import issue but… – New cloud CRM system is generally unreliable – Number of outages – Most recently, it has been down for 5 consecutive days – Fundraising newsletter is due to be issued this week
  15. 15. Managing an outsourcing contract o Why are we talking about this? – Horse in your cow – Successful outsourcing long-term partnership – however hard you try, contract may not cover it o What are the issues for Save the Lawyers? – Increased cost to fix problems – Alternative solutions - who bears the cost? – Termination unlikely to be practical option
  16. 16. Managing an outsourcing contract o Does this really happen? – Poor performance across range of issues – Cost of transferring to replacement unaffordable; data centre means effectively exclusivity – Contract not clear o Tips and tricks – Tools to manage – service levels – Tools to check – audit, reporting, management information – Tools to resolve – remediation, step-in, withholding payment, escalation, dispute resolution – Relationship management - commercial leverage; incentives for improvement; going elsewhere
  17. 17. Conclusion o Don’t rush in – outsourcing is a long term commitment and justifies investment up front o Get the contract right – resolving issues later leads to disproportionate cost and risk o Actively manage the contract and relationship – be prepared to deal with change; falling out is expensive

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