WillowTree Advisors

One of the most important aspects of Outsourcing Governance is the governance Committee Structure. 

The nature of Outsourcing Governance Committees are several: 

It is important to note that the structure must be customized to work with the scope, terms and conditions of the contract, as well as the structure of the client organization.  Remember that the committee structure does relieve the client of making decisions, rather it serves to inform the client and assist with the resolution of issues, and the furtherance of communications between client, client organization and service provider.

Need to Develop an Outsourcing Governance Team?

Many of our clients, after completing an outsourcing contract, realize that they need to get down to the business of creating a governance organization to oversee the scope of the contract.  Sometimes, our clients believe that a single person can perform all the activities associated with the new delivery model.  Occasionally, with very small deals and a very experienced person, that may be the case. 

But in most situations, this is just too broad a scope of activities, and requires experience in areas that are too specialized for one person.   Here we outline a sample of a governance organization, with roles and responsibilities and skillset requirements. 

The  basic template below can be used to design a customized organization for your outsourcing agreement. 

IT OutSourcing Governance Job Descriptions_Template

This, of course, is just a starting point.  You must analyze your outsourcing agreement and customize the organization to meet the special needs of your contract, including scope, relationship intent and organizational maturity.

Consider the Cloud computing enables businesses to access on-demand, cost-effective technical resources. Cloud computing has quickly become a game-changing trend in the IT services industry. More than 70% of firms in the developing world, along with 46% of firms in the developed world, are reviewing their IT services alongside the new market offerings¹ in order to transform their businesses, improve responsiveness, shore up weaknesses or decrease costs.

Types of Cloud Computing

Cloud computing is offered in several variations, but the most common three types of offerings are: Software as a Service (SaaS), providing on-demand applications over a remote, usually public, network; Infrastructure as a Service (IaaS) delivering storage, processing and network capacity over public, private or hybrid networks; and Platform as a Service (PaaS), providing the network and technology in remote data centers so that IT teams can build, host and support applications.

Questions to Ask your Cloud Provider:

Putting your data, software and hardware and important  information services to the cloud is not without  risk. While cloud service customers can save money in areas like software licensing, hardware costs, power charges and staff salaries, close attention must be paid to risk.  The following presentation identifies six areas of risk you should be discussing with your cloud providers.  Click on the Red Tabs in the presentation to view critical questions you should be asking.

Will Lean Six Sigma Initiatives and Training Make Your People More Productive?

Process Optimization is big business these days.  It seems that everyone is thinking about Six Sigma or Lean Initiatives, both in the commercial and public sectors.  Lean Six Sigma Training is widely utilized as a way to get quick results. As a process optimization and operational enhancement program, Lean Six Sigma is designed to effectively improve organizational output. From increasing production to precise waste removal, this highly popular program has helped numerous companies achieve dramatic results. Whether it’s tackling costly delays or increasing efficiency, Lean Six Sigma ensures timely and productive results for all your employees and operational processes. In order to reap the benefits of this popular program, you need the services of Lean Six Sigma experts and Lean Trainers. The key to longevity and success is to develop an overarching program within which Lean Six Sigma Training and projects can be implemented.

Preparing for Outsourcing Proposal Oral Reviews

If you have put together a set of selection criteria for your outsourcing RFP, distribute and review these with all team members before they start reading.  Team members can then read and make notes or indicate questions on each proposal.  Your team can then complete an initial evaluation or scoring of the proposals.

When the team gets together to jointly discuss the proposal and collect questions, the initial evaluations can be discussed.  However, remember that if there are questions about the proposal that must be answered, the answers and clarifications provided by the Service Provider can change the scores.  Final scoring should only be done after the orals are complete, and any updates to proposals are reviewed. 

Evaluating the Pricing of an Outsourcing Proposal

Some people are often surprised to learn that evaluation of the pricing of an outsourcing bid is complicated and not a strictly financial activity. Certainly the models can be run by the financial team, but the input to the normalization activity must be provided by the evaluation team. 

The objective is to evaluate and compare apples to apples pricing, by building a solid business case for each bid.  But before you can do this, you must normalize the price. 

How to Read a Complex Strategic Sourcing Proposal

There are some recommendations here that will resonate with anyone who has ever had to read and evaluate complex proposals from multiple providers. These suggestions are derived from years of experiencing and leading these activities. 

Here are some suggestions for making the task easier.   

Beware the Words!

Confused by weasel words, slick marketing, vague responses? Understand that there is a secret language of outsourcing sales and proposals, known to insiders, but carefully hidden from the uninitiated. You must be aware of this language and read intelligently.  This is the area that slips up most readers of proposals.  Most unadvised readers will come away feeling good about what they read, when they should be feeling very suspicious and concerned.    

Look for promises that appear to be too good to be true.  Look for words like “we can provide…”, which indicate that they have the capability to provide a specified service, but have not necessarily included it in their bid at this point. Any description prefaced with words like “in the past we have..’ or “we will discuss with you ..” or “for client xyz we did…’ indicate that the service provider is demonstrating a capability -- but not a promise to deliver.   

Service Providers hate to say no (until they have sealed the deal)

Service Providers don’t always make the answers to RFP requirements clear, especially a NO answer. Sometimes they hint at the real answer, but bury it so deep it is difficult to find. Why is this?

This, of course, is the essence of the game. Service providers are in sales mode when they respond to your RFP, so it is in their best interest to gloss over areas of weakness and emphasize strengths. Saying "no" to your requirements is a death knell in sales.

Your sourcing processes may drive them to say yes to everything, whether they mean it or not. It is often easier to tell you what you want to hear, rather than provide you with the best solution, disagree intelligently, or own up to the fact that they just “can’t/won’t” do what you have requested. The trick from their perspective is to get the sale and they will let the delivery team worry about those details later.