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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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