IT Outsourcing & Cloud Computing
Today, organisations are looking to outsourcing service providers to help reduce costs and improve the efficiency of their IT processes. Many organisations, which are using an IT outsourcing strategy, are struggling with monitoring and measuring the risks, value and performance. Executives admit knowing they should take a holistic view of IT outsourcing risks, but typically look first to cut costs and second at managing the inherent risks.
As organisations continue to outsource their transaction processing, application management, support and development processes, the risks presented and challenges associated with managing these relationships becomes increasingly difficult. Whether you use an Internet, Application, Managed Service, Hosting Service, Storage Service, Network Service or any other type of outsourcing service provider, you are relying on someone else to run (part of) your business functions. With that reliance comes the responsibility to manage and control their activities as they relate to your business. And like any tool that is handled improperly, outsourcing can make matters worse when mishandled. The problem remains rooted in how outsourcing service providers are selected and the nature of the contracts agreed. Traditional methods can either be very informal and unstructured, quickly settling on one supplier and then ‘negotiating’ without the benefit of competitive pressure. Alternatively, they are very structured and place constraints on both the supplier and the client; the result is a tight, but restrictive, deal for a commodity service, delivering only limited benefits after 9-18 months of selection and negotiation.
Outsourcing Management consists of several processes:
- Contract / Relationship Management - The processes and procedures in place to proactively manage your outsourced provider.
- Regulatory Compliance - The process ensuring that your outsource provider complies with the regulatory requirements placed on your business.
- Provider / Client Services – Risk management services tailored for both the outsource provider and the recipient of outsourced services to ensure implementation and operational success.
What are the real problems? Contracts are signed, services are performed and the operations are running. Often times, that is where the process stops. organisations and Service Providers alike often face many challenges in setting up a management structure to ensure the ongoing maintenance of the relationship. Here are some of the issues I have encountered when I was called in by organisations:
- Billing issues and exceptions
- Insufficient monitoring of service performance & billing
- Changes in market forces and/or or contract scope
- Instances of non-compliances and poor service levels
- Significant regulatory, compliance, financial and service risks
- Changes in personnel; either within your organisation or at the outsourcing service provider
- Lack of history with the outsourcing service provider
- Deteriorating relationship with outsourcing service provider
I provide both business pre-implementation services (consultative) and post-implementation services (audit/review) to help you understand and manage your relationships with your outsourcing service providers.
- Understand your risks. I approach outsourcing projects from a business perspective and start by first understanding your business itself – how the outsourcing effort is helping you achieve your strategy and what potential risks might mean to your business. I work closely with you to perform comprehensive assessments of the quality of your existing outsourcing risks.
Design an outsourcing risk plan. I help you define the combination of organization, skills, processes, software, and technology that aligns your current and future needs with your business objectives and I work closely with you to evaluate options and then define policies, education, training, technologies, standards, roles, responsibilities, processes, and metrics needed for a sustainable outsourcing management program.
- Support your outsourcing monitoring efforts. I can help supplement your management and monitoring capabilities with periodic outsourcing assessments designed to confirm that your outsourcing relationships are proceeding as planned and the significant issues have been surfaced and are being addressed.