IT Outsourcing (Risk & Control)

Transcription

1 IT Outsourcing (Risk & Control) Are your services Transparent or Black Box (or soon to be) Commercial in Confidence

2 Profile Graeme Mann Consulting Director Acumen Alliance Specialist in Shared Service, Outsourcing, Specification, Validation, Services Procurement. Market testing, Procurement process, Cost modelling, Business process, Relationship frameworks Transition management, Services risk mitigation. General Electric, Computer Sciences Corporation, Shell Australia, Santos BHP Billiton, State Revenue Office, Melbourne Water, Environment Australia, Powercor 2

3 Housekeeping 1. Who expects me to talk for 45 minutes? 2. Who wants me to talk for 45 minutes? 3. How many of you came for the drinks at the end? 4. Do you expect to ask questions during the presentation? 5. Who thinks they know all about this topic anyway? 6. Do you know what equipment is being used today? 7. Is that important to you? 8. Do you think you will know if you hear something of value? 9. Do you know what will typify a successful session? Number of slides? The value in each slide? 10. And of course if you don t understand anything its you not me that is the problem. 11. SIMILARLY. 3

4 For Services - Can You Easily access process information? Easily access infrastructure information? Easily access performance information? Identify who does the work? Identify metrics that are meaningful? 4

5 Key Threat Ignorance. You don t know what you don t know. Cant mitigate the risks 5

6 Self Evident or Maybe Not 1. But I have and Service Level Agreement I will have it covered. Its their problem now. 2. Be prepared to spend the period of the agreement arguing, mistrusting the figures or showing blind faith. 3. Most Infrastructure SLA can be manipulated to fit. 4. Most SLA that are measurable are infrastructure based = Risk 6

7 Examples " Intellectual Property Loss " Infrastructure degradation " Business Continuity exposure " Contract or Service Department Capture " Governance Pitfalls " Poor service is masked. " Poor dollar value for services 7

8 Keys to the Black Box - Control Outsource or Share the right stuff Knowledge Management Framework Relationship Framework Reporting & Performance Framework Enabling Tools $ for IP/Security/Flexibility 8

9 Key Mitigation Process Map The service processes and overlay on infrastructure Measure Those things critical to quality for the business Manage Using control charts and dashboards continuously 9

10 Action Timeline Compass ª as is Needs to be Now FUTURE STATE GAPS PLANS Metrics & Controls Nothing new in this but most overlooked in services implementations. Is Multi step. Is a continuous cycle. 10

11 Understand & Find the Processes Requirements Requirements S I P O C Suppliers Inputs Process Outputs Customers What you Think it is What it Really is What it Should be What it Could be MAP 11

12 What then? Improve if you like (value for money). Understand which ones are key. Measure those. Reduce Variation with controls 12

13 Focus Areas 13

14 Services Cataloguing Maturity and Need Services catalogues can include technical, nontechnical, and management services. 14

15 The catalogue can include 1. Why the service exists, 2. Who uses the service, 3. Qualitative understanding of the performance, 4. Quantitative understanding of the performance, 5. Consistency requirement between qualitative and quantitative measures, 6. Skill requirements which links into our staffing competency review, 7. Quantification of the amount of service required, 8. Process maturity of the services. 15

16 Competency and Skill Right Person Right Job Know what you have or are buying. Otherwise pay top dollar for minimum skill 16

17 Where is this going? 1. If you know where you are coming from (most critical of all steps). 2. If you can measure or baseline before you discuss needs with providers (internal or external). 3. You can more easily identify progress and success. 4. Identify emerging risks. 5. It is not simply about adding up infrastructure maintenance costs when sourcing. 1/3 rd of the picture. 6. It works for supply of widgets NEVER for Services. 17

18 Getting from A to B Strategic Find the starting line Pick the right Service Transition Allow enough time and double it 18

19 Strategic Examine the overall business strategy and needs of key stakeholders. Develop relevant services strategies and related value propositions. Develop the guidance and control framework for in depth technical plans and metrics. The business can then build its services and directly monitor their progress towards success. Components: Review the Business Strategy, Establishment the Services Strategy, Outline of As Is situation, Outline of Needs to be Now, Outline of Future State, Plan to achieve, and Planned business impactª Values: Direct linkage of strategy, plans and outcomes, Know the starting point for investment, Measurable outcomes, Expected changes identified and why, and Exception based executive balanced score carding ª 19

20 Starting Line Focus on finding the current maturity of services, and the financial performance. A clear cost to quality position for the services business can then be established based on - "What it is now" Compared with what "You think it is then "What it should be. Action plans and metrics for progress and success can result, reportable from project to executive level in your business. (Stakeholder buy in) Components: Services Catalogue, Services Maturity, Process, Knowledge, Relationship True Cost per service, Gap Analysis, Plan for change, and Cost Benefit of the change Values: Known starting point, Investment for change known, Degree of change selectable, More accurate planning, Defined and measurable metrics for the future, and Know when you have arrived 20

21 Right Service for the Job 1. Once you understand your services, their current quality and cost relationship. 2. Determine the best way to provision them, structurally & financially? 3. Determine if services are best done: Stand alone, Shared internally, Sourced externally or provided in any combination, Market test (this does imply you tender) 21 Components: Service Model developed, Provision options developed, Cost models created, Models tested, Cost, benefit and risk outcome, Model selection, and implementation plan Values: Core & Non core services understood, Comparative service costs validated, Right service for right purpose, Right provider for right service, and Measurable services, Performance, Cost

22 Transition 1. Transition is the vital element in services provision success. 2. Often done in haste and repented at leisure. 3. This should be a combination of relationship, process and financial management best practices. 4. It ensures realization of your business investment. 5. Don t short change this process Components: Service design converted to operational action, Leadership framework, Operational reporting, Relationship Framework, Knowledge/Information Framework, Embedded process for change, and Financial Management Values: Cost per service tracking, Performance and business impact reporting, Early intervention options, and Visible service variation, its cost and risk of change 22

23 Questions or Drinks? 23