Outsourcing Partnership

Shared Perspectives

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?•How much appetite/ capability do you possess for managing a day to day relationship?

Why are we doing it Remove constraints on skill and 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 testing model 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 it

Using all the work done to date formalise the activities to achieve an informed and tangible closure

Create a simple capability assessment document, this should also include details of POCs dates and potential size etc

Identify 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 strategy

Formalise engagement with these specialist suppliers, and in collobration 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 Journey

The selection processQualifying your selectionLiving the relationship.

The Selection Process

A 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.

Status

Oct 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 GovernanceOverall GovernanceOverall Governance

Activity InitiationActivity Initiation

Capability StatementCapability Statement

Establish Contractual & Commercial FrameworkEstablish Contractual & Commercial Framework

Stakeholder Engagement

Stakeholder Engagement

Kick-off Meeting 25/10/07Kick-off Meeting 25/10/07

Pipeline DemandPipeline Demand

Selection Timeline

Supplier NDAsSupplier NDAsSupplier NDAsSupplier NDAs

Start to issue Supplier H/L CapabilitiesStart to issue Supplier H/L CapabilitiesStart to issue Supplier H/L CapabilitiesStart to issue Supplier H/L Capabilities

Supplier AssessmentsSupplier Assessments

Identify POCsIdentify POCs

Set Customer/Demand Makers ExpectationsSet Customer/Demand Makers Expectations

Collate Commercial InformationCollate Commercial Information

Selected Supplier & POCs

Selected Supplier & POCs

Detailed POCs Plans

Detailed POCs Plans

20072007

LOI/Heads LOI/Heads of Termsof TermsLOI/Heads LOI/Heads of Termsof Terms

Detailed Service DescriptionsDetailed Service Descriptions

Checkpoint Go/No Go 21/12/07

Checkpoint Go/No Go 21/12/07

CommunicationCommunication

Current and Future Business Risk ProfilingCurrent and Future Business Risk Profiling

Team Supplier MeetingsTeam Supplier Meetings

Relevant Client Case StudiesRelevant Client Case Studies

Identify Relevant Clients 29/11/07

Identify Relevant Clients 29/11/07

Team Client ReferencesTeam Client References

Request For Process (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

• 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

• 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

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

• Effective framework to manage the relationship

• Key personnel

• Escalation mechanisms

• Conflict resolutions

• Identifying key metrics

• Account review mechanisms

• Reporting mechanism

• Change management

Governance – Vendors Perspective

Onsite Account Manager Receiving 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 Management

ensuring 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 vendors needs to know of any unique conditions of employment.

SLAsAgreeing 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 MT staff managing NFUM staffKnowledge retention/transfer

Between MT and NFUM Between MT 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

Key Objectives To Takeaway

Honest addressing of both teams questions will give you a far more productive environmentAgreeing 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 ?