james brodie - outsourcing partnership - shared perspectives
TRANSCRIPT
Outsourcing Partnership
Shared Perspectives
IntroductionJames Brodie
Test Manager/Service Delivery Owner
NFU Mutual
IntroductionThis is a presentation based around an outsourcing project I have participated in within the last year.
This isn’t a sales pitch for a vendor.
This IS a talk about the challenges I have faced from inception through to the day to day running of the relationship.
This will be useful for anyone who is about embark on their own outsourcing/ relationship journey
What are you looking forOutsourcing? Partnership?
•How much appetite/ capability do you possess for managing a day to day relationship?
Why are we doing itRemove constraints on skill and Full Time Employee FTE demand
requirements to address additional testing areas (e.g. non functional testing)
Gain a greater and more efficient access to tooling and automation
Gain greater and more efficient access to test consulting
Allow internal capability to focus on the Intellectual Property (IP) of running the NFUM core business and move their contribution up the value chain
To provide flexibility to address variable demand across a number of testing phases/requirements for additional testing areas
Achieve long term cost efficiencies for additional testing areas
What are we doing Assess
Tangible and measurable results of alternative approaches
Robustness and flexibility to stand the test of time
Measure Performance of the relationship using KPIs (e.g. productivity,
quality, timeliness, reporting, Others – downtime, support effectiveness, effectiveness of knowledge management, etc)
Ability to meet common or specific business need
Validate Phased approach driven by maturity levels to minimize risk and
disruption, but significant enough to deliver benefit (i.e. not a body shopping exercise)
How are we going to do itUsing all the work done to date formalise the activities to achieve an informed and tangible closureCreate a simple capability assessment document, this should also include details of any Proof of Concept (POC) dates and potential size etcIdentify a specialist suppliers that could work in partnership to help develop the best strategy moving forward.Use existing capability statements to help develop the understanding of viable models and help formulate an initial strategyFormalise engagement with these specialist suppliers, and in collaboration allow them to demonstrate their tangible capabilities evidenced by maturity in the models by using real life examples (in the insurance space)
An implementation plan for formalised POC(s) with a selected supplier
Verify the selection based on results of the POC(s)
Our JourneyThe selection process
Qualifying selection
Living the relationship.
The Selection ProcessA simple scoring matrix to gain hard and tangible results
A simple commercial assessment model to compare one partner with another etc.
Evaluation criteria should be developed prior to engagement to ensure honest and independent evaluation of partners
Set common challenges for suppliers to overcome via the capability statement, which can then be used for tangible evaluation
Suggestions of common challenges faced elsewhere.
StatusOct 08Oct 08 Oct 15Oct 15 Oct 22Oct 22 Oct 29Oct 29 Nov 05Nov 05 Nov 12Nov 12 Nov 19Nov 19 Nov 26Nov 26 Dec 03Dec 03 Dec 10Dec 10 Dec 17Dec 17 Dec 24Dec 24
Overall GovernanceOverall Governance
Activity Initiation
Capability Statement
Establish Contractual & Commercial Framework
Stakeholder Engagement
Kick-off Meeting 25/10/07
Pipeline Demand
Selection Timeline
Supplier NDAs *Supplier NDAs *
Start to issue Supplier H/L* CapabilitiesStart to issue Supplier H/L* Capabilities
Supplier Assessments
Identify POCs
Set Customer/Demand Makers Expectations
Collate Commercial Information
Selected Supplier & POCs
Detailed POCs Plans
2007
LOI*/Heads LOI*/Heads of Termsof Terms
Detailed Service Descriptions
Checkpoint Go/No Go 21/12/07
Communication
Current and Future Business Risk Profiling
Team Supplier Meetings
Relevant Client Case Studies
Identify Relevant Clients 29/11/07
Team Client References
Request For Proposal (RFP)Project ScopeProcedureBenefit RealisationSupplier History & CapabilityRequirementsRelationshipCommercial ConsiderationsExit StrategyContractual RequirementsAdd Value And InnovationFormat And Presentation Of ResponsesAudit And Control
RFP From The Vendors Perspective
• Understanding the needs of the Client• Technology• Domain• Testing requirements
• Value addition• Relevant prior experience• Key personnel• Key differentiators that the client can take away
Proof Of Concept (POC)
ObjectiveOutcomeScopeBackground InformationMethodologyTimelinesMetricsSLAsSuccess Criteria
POC – Vendors Perspective• First impression is the best impression •Delivery
• On Schedule• On Budget • To the required standards/ quality
• Showcase• Understanding• Talent• Experience• Knowledge
• Go beyond stated client needs•Gain an understanding of client pain points and organization
POC Scoring Matrix
Microsoft Excel Worksheet
Governance
• Effective framework to manage the relationship• Key personnel• Escalation mechanisms• Conflict resolutions• Identifying key metrics• Account review mechanisms• Reporting mechanism• Change management
Governance – Vendors PerspectiveOnsite Account Manager
First point of escalationReceiving all sourcing requirements from NFUMCoordinating to get the right fit resourcesCoordinating with NFUM Group IT Testing team to seek clarity on exact skill requirements, etc. and organize any interview that needs to be doneEnsuring agreed SLAs are met for resourcing
Relationship managementowns the business case
Program managementDrives the vision and strategic intent to a project level
Project Managementensuring the management of project delivery on everyday basis
Operational managementensuring the technical and quality compliance during delivery of the project
Key principles Transparency at all levels and forums Periodic checkpoints, timely escalation and quick decision making
Living The Relationship
Procedures Ensuring that you have your own procedures documentedEnsuring the procedures are explained and understood PRIOR to a piece of work starting.The vendor needs to know of any unique conditions of employment.
Service Level Agreements (SLAs)Agreeing the terms of the SLAWhich of the SLAs will have the biggest impact on the businessWhich of the SLAs will you deal with most commonly?Have the SLAs been communicated to all the major stakeholders?
Living The Relationship
Integrating the teams Moving away from us and them Team buildingGoing as far as vendor staff managing NFUM staffKnowledge retention/transfer
Between vendor and NFUM Between vendor staff
Moving up the value chain and away from pure staff augmentation Moving beyond Testing Service
Living The Relationship
Issue ResolutionTimely raising of issuesWillingness to work together
Confidence BuildingMetricsReviewing of work
Impact on other relationships (e.g. contractors/agencies) Communicating potential change to other parties
Living The Relationship
Management overhead The need for a relationship owner to deal with day to day issuesEscalation pointsJuggling business as usual with vendor management
Management liberation The ability to hand over a piece of work with confidence.
GovernanceEnsuring you follow the disciplines set down in the governance documents.Being able to work to the spirit of the document rather than relying on it to resolve issues.
Living The Relationship
Moving offshoreStaff may worry about their jobsConnectivity IssuesEnsuring communication procedures are in place.Quality reviewsMetricsReporting structure agreed.
Living the relationship - measurement
Microsoft Office Excel Worksheet
The Vendors Perspective
Cultural Integration
NFUM specific knowledge
Speed
Process expectations e.g. Lack of formal capacity planning
Critical Success Factors
Investment in knowledge transfer
Investment in designated people for relationship management
Budgeting for initial teething problems
Periodic checks and balances
Key Objectives To Takeaway
Honest addressing of both teams’ questions will give you a far more productive environment
Agreeing which metrics both companies use ensures expectations are understood and agreed, and it allows you to implement SLAs.
Communication is the key to any engagement. By initially having some tough talking it allows both sides to work within agreed parameters.
Questions