Maximizing Value by Innovating Managed Services

Transcription

1 Maximizing Value by Innovating Managed Services Time Warner Ashish Malhotra VP, Global IT Workforce Management Neo Group Atul Vashistha Chairman sig.org/eval

2 MAXIMIZING VALUE BY INNOVATING MANAGED SERVICES A presentation by Time Warner and Neo Group ASHISH MALHOTRA, TIME WARNER ATUL VASHISTHA, NEO GROUP SIG GLOBAL SUMMIT 2016 Carlsbad, CA

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4 4 NEO GROUP OVERVIEW Since 1999, we have been helping clients accelerate benefits and minimize risks associated with global in-house services and sourcing We have a Singular focus on the global services and sourcing supply chain We achieve outcomes through deep IP, real-time analytics, globally recognized experts, proven methodologies and co-creation with our clients We deliver results through three distinct and linked solutions and services: ADVISORY SERVICES Globalization Strategy Sourcing Location strategy Health Checks Renegotiations Governance Design GOVERNANCE SOLUTIONS Run and support Ongoing Governance Services, such as, Resource, Contract and Performance Management Services SUPPLY WISDOM Country City Supplier Outsourced Service Desk Monitoring Subscription Services 2016 Neo Group Inc. Proprietary

5 5 AGENDA How do we balance between staff-augmentation, managed capacity and managed services? How do we ensure what is right for managed services? How do we manage risks of sourcing in a managed services model? How do we minimize the liabilities - contractual staff and with suppliers? How do we ensure performance and relationship alignment with suppliers? BASIC Functional & Technical Expertise Project Team Task Management Process & Methodology Compliance Project Issues Management Manage Project Inputs STRATEGIC Soft Skills + Global View Stakeholder Influence Strategic Alignment (Quality + Value Delivery) Managing Risks in Delivering Value Own Program / Project Outcomes 2016 Neo Group Inc. Proprietary

6 TYPES OF OPERATING MODELS Types of Engagement Delivery Models WHY should a Buyer Manager use this model WHAT is the Buyer really purchasing WHO is responsible for managing the team WHEN does the engagement end WHERE are the team members located HOW is the engagement being paid for Staff Augmentation Unstructured body of work Able to manage individual resources Willing to endure all risks People Brains by the hour Buyer Manager When the Buyer Manager no longer requires the skill The Buyer Manager decides the location of the team members Time & Materials Billable hours based on Individual rates and skills Capacity Ongoing, highly repeatable work Able to manage a process/factory Willing to share risk with a provider A set of related skills Production capacity Combined Buyer, Manager, and 3rd-Party Provider Manager When the work activity has been shifted to another set of resources (internal or external) The Buyer Manager and Provider Manager agree on the location of the team members Pre-established block of work hours Blended rates Fixed Deliverable Defined beginning and defined end Able to manage to a workplan Willing to share risk with a provider Deliverables 3rd-Party Provider When the deliverable is completed The Provider Manager decides on the location of the team members Firm Fixed Fee Based on reaching milestones Managed Service Ongoing engagement with specific outcomes Able to manage compliance to SLAs Willing to share risk with a provider Outcomes Performance 3rd-Party Provider When the work activity has been shifted to another set of resources (internal or external) The Provider Manager decides on the location of the team members Monthly Fixed Fee Based on performance 6

7 7 POLL What portion of your outsourcing Managed Services? What portion do you expect it to be by 2020? 2016 Neo Group Inc. Proprietary

8 CRITICAL SUCCESS FACTORS While it is important to understand and manage all of the components of a sourced engagement, there are a select set of management activities that require a considerable level of focus, on an on-going basis, in order to ensure the success of the engagement. Management Activities Activities In Scope Activities Not In Scope List of Deliverables Acceptance Criteria List of Responsibilities Assumptions and Dependencies Risks and Mitigation Plans Communication and Escalation Change Control Pricing and Invoicing Schedule Knowledge Transfer/Transition Governance and Reporting Service Level Agreements & Credits Productivity Improvements Quality Improvements Warranties Critical Success Factors (CSFs) must be closely managed to ensure the opportunity successful engagement Staff Augmentation Capacity Fixed Deliverable Managed Service 8

9 CHOOSING THE APPROPRIATE OPERATING MODELS The selection of one operating model over another will be primarily driven by the Manager s desire to manage and control the outcome of the engagement, coupled with the need to assume responsibility for managing inherent risks. L Low M Medium H High Outsourcing Operating Models Staff Augmentation Capacity Fixed Deliverable Managed Service Example Engagements Oracle Database Analyst Java Application Architect Business Analyst Testing Centers of Excellence Virtual bench of common or repeatable skill Requirements Analysis Phase Application Construction Phase Full life-cycle App. Development Legacy Application Maintenance Infrastructure Maintenance Remote Server Monitoring Level of Perceived Control Level of Endured Risk Buyer 3 rd Party Buyer 3 rd Party H L H L M M M M M M L H M M L H The Buyer Manager can significantly reduce their risk by engaging Third-Party Providers to provide Fixed Deliverables or Managed Services whenever possible. 9

10 Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester Proj. Mgr. Analyst Architect Developer Tester ROLES AND RESPONSIBILITIES The responsibilities for each engagement activity can be best portrayed in a responsibility assignment matrix, often referred to as a RACI chart. Based on the selected type of sourcing engagement, certain responsibilities will shift from Buyer to the Provider. R A Responsible for completing that step in the process Accountable for ensuring that the step is completed C I Consulted prior to the completion of the step Informed of the results once the step is completed Buyer Roles Provider Roles Buyer Roles Provider Roles STAFF AUGMENTATION FIXED DELIVERABLES Plan Project R,A C,I Analyze Req. C,I R,A Design Software I C,I R,A I Build software I C C,A A I R Test Software I C,I R,A Plan Project R,A A C R,I R Analyze Req. I A,C A I R Design Software I A,C A I C R I Build software I A,C A I C R I Test Software I A,C A I C R Buyer Roles Provider Roles Buyer Roles Provider Roles CAPACITY MANAGED SERVICES Plan Project R,A C,I C,I Analyze Req. C,I R,A Design Software I C,I R,A I Build software I C.I A,C A I R I Test Software I A,C A I C R Plan Project A,C A R,A R C,I Analyze Req. A,I A C,I R Design Software A,I A I C,I R I Build software A,I A I C CR I Test Software A,I A I C,I R 10

11 THE STATEMENT OF WORK (SOW) The (SOW) defines the specific components of a sourced engagement, with each requiring differing levels of detail, based on the type of engagement model that is selected. (e.g., Staff Augmentation, Capacity, Fixed Deliverable, Managed Service, or Hybrid) SOW Components Staff Augmentation Capacity Fixed Deliverable Managed Service Activities In Scope L M VH H Activities Not In Scope M VH H List of Deliverables L H H Acceptance Criteria L VH H List of Responsibilities L L H H Assumptions and Dependencies M H H Risks and Mitigation Plans M H H Communication and Escalation L M H H Change Control L VH VH Pricing and Invoicing Schedule L L VH H Knowledge Transfer/Transition L M H Governance and Reporting L M H H SLAs & Credits L M H VH Productivity Improvements H L H Quality Improvements H L H Warranties M H VH L Low M Medium H High VH Very High Completion of all SOW sections is important but there is a key set of components that must be well thought out to ensure the greatest opportunity for success. If these components are not fully understood prior to engagement initiation, the result is likely to be mismanaged expectations between Buyer management and the Provider. 11

12 OUTCOMES VS. TASKS The focus and activities of internal staff differ when managing outcomes vs. tasks. Outcomes Manage the Result Tasks Manage the Work Clients Manage Requirements Communication Performance Results Relationships Expectations Scope Time Resources Activities Process Deliverables Critical Success Factors Service Level Agreements Knowledge Management Provider Governance Program Reporting Steering Committee Escalation Process People Talent Management Domain Expertise Project Management Facilities Quality Assurance 12

13 13 FOCUS WILL BE ON MANAGING PERFORMANCE Not everything that counts can be counted, and not everything that can be counted, counts. - Albert Einstein Any managed services model is based on expected results / outcomes achieved through adoption of leading practices and embraced by stakeholders and followed with the right spirit and rigor Effective measures to monitor and deliver on the service levels (expected outcomes) is critical to the adoption of managed services - adoption is typically slower than expected across organizations Continuous improvements is an on-going process maturity is reached over a period of sustained efforts Monitor and measure performance indicators that actually impact the business when service levels aren t met 2016 Neo Group Inc. Proprietary

14 14 DEFINE CONSISTENT & EXTENSIVE SERVICE LEVELS It is important to follow a consistent service level framework SOURCES Used In-house New Created In-house Supplier Provided Business Provided Co-Developed Peer Shared EVALUATE & DEFINE Impact - What affects the business Influence Will it have an influencing effect on the outcomes Will it manage stakeholders expectations Measurable Can it be measured objectively Relationship - Will the measures contribute to knowledge sharing and on-going improvements MONITOR What Really Matters CRITICAL SERVICE LEVELS (CSL) Leading & Lagging Indicators REPORTING SERVICE LEVELS (RSL) CRITICAL DELIVERABLES 2016 Neo Group Inc. Proprietary

15 15 METRICS IMPACT SIGNIFICANTLY UNDERSTAND RATIONALE Process Frequency Rationale Client Provider SLA Monitoring Daily / Weekly Review SLA Analysis and reporting Monthly Control Calculate & monitor utilization Daily Capacity Estimation/Productivity Calculate Performance Credit, Earn-back Yearly Financial Impact Validate Performance Credit, Earn-back Yearly Financial Impact Validate RCA and track progress Ongoing Operational Excellence Manage Continuous Improvement (SLAs) Ongoing Continuous Improvement Review service level applicability Quarterly Redefining SLAs Publish Business/IT Availability Index Monthly Business Continuity Hiring Fulfillment / Metrics Monthly Business Continuity Monitor critical deliverables Notes Yearly CSAT Engagement Operational Health - check Quarterly Ops and Relationship Improvements Cultural Integration One-Team-Team On-Going Operational Excellence Project Reporting Monthly Control Contractual Compliance Audits Yearly CSAT Legal Compliance 2016 Neo Group Inc. Proprietary

16 GOVERNANCE REPORTS AND TREND ANALYSIS Governance reports should include a select set of lagging indicators, in the form of SLAs, and an even smaller set of leading indicators, in the form of KPIs. Selection of SLAs and KPIs The governance reports should contain 4 to 6 SLAs, and 1 or 2 KPIs, that are felt to be the most important factors to the business. These 5 to 8 items will form the basis of meaningful heads-up metrics on the Manager s dashboard. The Provider is meeting the SLAs, but the engagement is failing Even though a Provider is meeting their contractual obligations, the KPIs may indicate a downward trend in the performance of the business which should warrant action. The value of choosing the right KPIs If the correct measures have been used in the governance report, and the KPIs are truly leading indicators, then critical issues can be dealt with proactively versus managing failed actions or results. The selected SLAs and KPIs may change over the life of the engagement, based on the changing needs of the business and the area of engagement that require management focus. 16

17 Towers ROBUST APPROACH TO GOVERNANCE Consider implementing a robust governance model with simple interfaces that increase delivery options and efficiency. 1 More Less PMO Build Operate Tactical Line of Business Service Management Contractors Vendors Strategy Governance Employees Partners Strategic Flexible Workforce Balanced and efficient sourcing based upon: Service clarity Standard procedures Stable processes Simple interfaces Measures and controls 1 Function Service Management 2 PMO 3 Build 4 Operate 5 Strategy 6 Governance Impact: Cost Risk H M M H H M H H L H M M Key Success Factors Proactive vendor management (VMO) Detailed metrics and KPIs Process automation with multi-vendor control capability Effective problem management Understand demand impact on invoice Clear projection by categories Actively manage risks and issues Run projects to audit ready methodology Demand process clarity Change mgt. controls Predictable releases Clear resource levels (e.g. shared roles) Efficient one & done metrics Proactive management Problem management remediation Automation aligned with delivery Clear priorities for Cost, Risk, and Quality Enterprise reference architecture Defined application objectives Close alignment with business operation Maintain compliance with standard technology and processes Oversight to achieve standardization Manage issues based on strategic priorities 17

18 AVOID COMMON PITFALLS Lack of buy-in from demand managers negatively impacts the provider s ability to deliver and may negate SLAs put in place for the outcome Ensure that internal staff is informed about the managed service model and strategy. Train managers for their new roles and responsibilities in a managed service operating mode. Make sure provider is qualified to deliver a managed service Providers that are unprepared for managed outcome models rarely deliver the product on time or within the budget allocated. New negotiation ensues related to change order and overtime. Understand providers capabilities and examples of how previous engagements were delivered during selection process. Beware the T&M engagement masquerading as Managed Service Set the right expectation up front and in contracts. Often, the client thinks they are contracted for managed service and the provider thinks the client is ultimately responsible for the outcome. Similarly, a client may sign up for managed service but consume on a staff augmentation model, which may also lead to unexpected outcomes. Understand the level of knowledge transfer effort required If you do not devote enough time to this, there is no way a provider can deliver the desired outcome. 18

19 19 ENSURE GOVERNANCE IS ALIGNED TO GOALS Strategic Governance Functional Governance Project Governance Align business strategy & global services initiatives Guide execution of enterprise wide global sourcing initiatives Ensure adequate risk mitigation and controls Program sponsorship Coordination, communication & control between process owners Provide for knowledge management Opportunity Identification & enable demand aggregation Cross-functional, cross-geography, cross-vendor alignment Manage global sourcing activities and contracts Manage vendor relationships, performance and resources Manage scope and integration Reporting 2016 Neo Group Inc. Proprietary

20 20 MANAGE THE RELATIONSHIP GOVERNANCE RELATIONSHIP MANAGEMENT FOCUS Corporate Services Escalation Categories ESCALATION PYRAMID Participants Financial Management Performance Management CORE TEAM / GMO Contract Management Global Audit Security Relationship Management Legal HR Finance Procurement Resource Management Continuous Low Performance / SLA ratings Unresolved Client / Provider difficulties Issues impacting MSA / SOW Issues Unresolved at Level 3 Falling Performance / SLA ratings Non- Action on Action Item (ATRs) / Recurring Issues Issues Unresolved at Level 2 Level 4 Level 3 Client CIO, GMO, Procurement, HR, Finance, Legal Pillar Head, Project Manager, Resource Manager Provider CEO, SBU Head, Delivery Head SBU Head, Delivery Head, Program Manager Client of Choice initiatives RACI Tracking issues to closure Communications strategy & management Meetings and visits (meeting cadence) CSAT Employee recognition programs One Team New opportunities Relationship feedback ENGAGEMENT ISSUES PRIORITIZATION Fall in Performance / SLA ratings Unresolved Task Request Prioritization Work Load Adjustments Quality / Productivity / Other issues not resolved at Level 1 Project Issues Process Deviations / Non- Compliance Task Request Prioritization First Level for Quality/ Production Issues Urgency Impact Prioritization Example Timeline High High High Low High Medium High Low Medium Low Low Low Continuous Low Performance / SLA ratings Unresolved Client / Provider difficulties Issues impacting MSA / SOW Issues majorly impacting business Falling Performance / SLA ratings Non- Action on Action Item (ATRs) Recurring Issues on Quality / Productivity Unresolved Task Request Prioritization Work load adjustment issues Issues impacting business New resourcing issue Reporting validation issue Project Issues Process deviations / non-compliance Task request prioritization issues Level 2 Level 1 Project Manager, Resource Manager Project Teams Program Manager / Offshore Delivery Manager Project Teams The key steps in the dispute resolution mechanism is to conduct periodic reviews of all project issues. The periodic reviews largely help in resolving the disputes at an early stage. 90% in 6hrs & 100% in 12hrs 80% in 12hrs & 100% in 24hrs 75% in 24hrs & 100% in 48hrs Relationship Management Performance & Reporting New Sourcing Opportunities CSAT Framework CUSTOMER SATISFACTION Requirement Fulfillment Solution Design & Delivery Commercial Interface Personnel 2016 Neo Group Inc. Proprietary

21 21 FOCUS ON PERFORMANCE & VALUE GOVERNANCE KNOWLEDGE MANAGEMENT FOCUS ON PERFORMANCE / OUTCOMES Corporate Services Share Point Folder Management Structure CORE TEAM / GMO Global Audit Security Legal HR Finance Procurement Syntel Engagement Governance Owner: GMO Relationship Manager Financial Management Owner: IT Admin / Finance Performance Management Owner: Project Managers & Resource Managers Contract Management Owner: GMO Relationship Manager Relationship Management Owner: GMO Relationship Manager Resource Management Owner: Resource Managers Knowledge / Research Owner: GMO Financial Management Performance Management Contract Management Relationship Management Resource Management Invoicing Process Documentation SL Validation & Reporting Process Change Request Process Issue Resolution / Escalation Process Resource Selection Process Industry Best Practices Monthly Invoices with Time Sheets as a listing Weekly / Monthly Reports Change Request Approval Forms Engagement Issue Log as a listing Requirements Form / JD Knowledge Artifacts Monthly Payout as a listing Service Credits Adjustments as a listing Quarterly / Annual Reports Service Credit Computation Model Operational Issue Log as a listing Change Request Log as a listing MSA / SoW Key Contractual Terms Ready Reckoner CSAT Governance Documentation - Structure - RACI Overall Performance Dashboard On-boarding / Offboarding Process Resource Tracker as a listing Reference Documents All documents to be uploaded / archived in Share Point within 48 hours of finalization / publication Service Levels / Performance Metrics monitoring & reporting Analyze trends in service areas (Service Levels) Schedule Management - Reorganize work processes to include offshore teams Offshore workflow / workload management monitoring & validating time-sheets & utilization Review workload distribution across resources Recommend productivity enhancements Monitor continuous performance improvement efforts Perform monthly operations reviews GOVERNANCE - REPORTING Reporting Flow GOVERNANCE QUALITY IMPACT BEYOND PROJECTS Process Frequency Rationale Client Provider SLA Monitoring Daily / Weekly Review SLA Analysis and reporting Monthly Control Calculate & monitor utilization Daily Capacity Estimation/Productivity Resource Manager Pillar Heads Validated Reports Consolidated Reports Variances Reports. Continuous Improvements CIO / Provider Stakeholders Calculate Performance Credit, Earn-back Validate Performance Credit, Earn-back Validate RCA and track progress Manage Continuous Improvement (SLAs) Review service level applicability Publish Business/IT Availability Index Yearly Yearly Ongoing Ongoing Quarterly Monthly Financial Impact Financial Impact Operational Excellence Continuous Improvement Redefining SLAs Business Continuity Project Manager Reports copied to GMO and Feedback Loop GMO Feedback / Action Items Hiring Fulfillment / Metrics Monitor critical deliverables Notes Engagement Operational Health - check Cultural Integration One-Team-Team Monthly Yearly Quarterly On-Going Business Continuity CSAT Ops and Relationship Improvements Operational Excellence Project Reporting Monthly Control Contractual Compliance Audits Yearly CSAT Legal Compliance 2016 Neo Group Inc. Proprietary

22 TRANSFORMATIONAL OPPORTUNITIES Sourcing has evolved from a tactical labor arbitrage model that started in the manufacturing sector, to a much broader strategic model. As Providers mature by commercializing their services, they have begun to provide more value-based offerings that are being leveraged by companies for business transformation. Sustaining Value Transforming Service Capabilities Process Resource Independence Continuous Improvement Operational Processes Virtualize Standardize Rationalize Sourcing Optionality Resilient Processes Increased Throughput Economic Transparency Reduced Run Risk Traditional IT Outsourcing Cost based on technical complexity and process Transform Transformation Outsourcing Potential Capability Asymptote: marks service constraint without transformation investment Limited benefits: cost reduction fueled by labor arbitrage New service continuum where costs decline as service increases C1 C2 Scalable Demand Response Predictable Service Quality CBI IT Infrastructure Service Portfolio Service capabilities grow as cost per transaction declines Control reactive operations by systematically addressing complexity drivers, while improving service delivery processes Service demand and capacity improvements result from changes designed to control volume while increasing response speed Transformed enterprise environment produces a service delivery continuum while simultaneously improving cost basis and service quality Chaotic Reactive Stable Proactive Predictive Asserting a new service continuum Operational Efficiencies: establishes service control based on transformed services Optimization: iterative transformation addresses complexity and value potential increases as services improve Service Excellence: predictable quality results from process improvement, team knowledge, and tool enhancement Measurable Results: business benefits that optimize bottom line and improve responsiveness 22

23 23 THANK YOU NEO GROUP GLOBAL HEADQUARTERS 6200 Stoneridge Mall Road, 3rd Floor Pleasanton, CA 94588, USA ATUL VASHISTHA Chairman, Neo Group ASHISH MALHOTRA VP, Workforce Management, Time Warner ASIA-PACIFIC HEADQUARTERS No 13, 1st Floor, C Block, Embassy Heights, Magrath Road, Bangalore AMSTERDAM, NETHERLANDS AUSTIN, TEXAS BOGOTA, COLOMBIA LONDON, UK NEW YORK, USA ATLANTA, USA SAO PAOLO, BRAZIL SILICON VALLEY, USA SYDNEY, AUSTRALIA 2016 Neo Group Inc. Proprietary

24 Evaluation How-to: Why? Your feedback drives SIG Event content By signing and submitting your evaluation, you are automatically entered into a prize drawing How? Option 1: App 1. Select Schedule 2. Select Schedule by Day 3. Select Day 4. Select Session 5. Scroll to Description 6. Click on the Evaluation link Option 2: Browser 1. Go to 2. Select Session (#WS06) COMPLETE & SUBMIT EVAL

25 Workshop # 6 Maximizing Value by Innovating Managed Services Speakers: ATUL VASHISTHA Chairman, Neo Group Atul@neogroup.com ASHISH MALHOTRA VP, Workforce Management, Time Warner ashish.malhotra@timewarner.com Download the App: bit.ly/sigfall16 Tweet: #SIGfall16

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