Tips for Successful Re-sourcing of IT Deals (Part II)

In our today’s post we continue to give tips for successful re-sourcing of IT deals:

6. Prepare for People Problems. The outsourcing deal you signed may limit your right to solicit and re-hire provider personnel or make it difficult for the new provider's employees to shadow or conduct other knowledge transfer work with the incumbent's people, says Andrews of Thompson & Knight.

7. Select the Right Silo. "Towers where an incumbent outsource provider has included labor, hardware and software as part of the service offering will be much more complex to transition to another service provider than that same tower being provided under a labor-only model," says Pace Harmon's Martin.

8. Calculate the Cost of Disruption. There will be a price to pay for moving the work to a new provider so figure out what it is before first. "Do your homework," Lepeak says. "Understand the risks, costs and the level and nature of the likely disruption, and weigh that against the benefits of the transition."

9. Master Multisourcing. Most of today's resourcing work involves a partial transfer of outsourced functions resulting in a multi-provider environment, says Andrews. Coordinating multiple providers takes time and effort. Andrews advises that new contracts address some of those challenges including cooperation among providers, customer consent and approval requirements, and common access or usage rights to software or other proprietary materials.

10. Make it Easier on Yourself Next Time. You've consulted the contract, calculated the costs, and made the decision to recomplete. When it comes time to sign on the dotted line with the new provider, apply what you've learned. "The outcome of a re-sourcing often depends on leverage," says Andrews. "Make sure you have some in the new contract."

Source: CIO

Read more...

Tips for Successful Re-sourcing of IT Deals (Part I)

Re-sourcing might seem a complicated process at first sight for most IT services customers, although it is not, unless you follow the expert advice provided by the best outsourcing consultants and outsourcing experts that we highlight in today’s post.

Re-sourcing – the process also known as "recompeting" a deal – means switching outsourcing providers or bringing work back in-house, and it’s quite a usual practice in business world, and businesses shouldn’t be afraid to switch providers if they feel unsatisfied with their current services.

A successful transition from one vendor to another requires cooperation between the two, and both sides should consider the following tips in order to succeed at the recompete:

1. Go Back In Time. "Remember why you outsourced in the first place," says Edward J. Hansen, partner in law firm Baker & McKenzie. "If the reasons to outsource are still relevant, then you should consider changing providers rather than abandoning the strategy."

2. Consider The Deal Lifecycle. "Contractually it is often easier – though not easy – to shift work from one provider to another at the end of a contract term rather than in mid-term when various penalties may be incurred," says Stan Lepeak, Director of Research in KPMG's Shared Services and Outsourcing Advisory group.

3. Consult Your Contract. "Your contract could include exclusivity provisions, minimum spend commitments, or rights of first offer or first refusal for the provider that contractually limit or prohibit resourcing," says Steve Martin, partner in outsourcing consultancy Pace Harmon.

4. Question Your Motivations. "I recommend spending the time to determine what is motivating the customer to pursue this path, and whether it may be possible to make the current relationship work," says Hansen of Baker & McKenzie. "It may be possible to reset the relationship, renegotiate the contract and avoid the operational risk of moving."

5. Question Your Outsourcer's Motivations. "If the service is bad, it may be an indication of an unprofitable deal for the supplier and they may be motivated to move away from it," Hansen says. "On the other hand, if you can have a good honest conversation about this, you may be able to renegotiate the deal and leave the services where they currently sit."

To be continued...

Source: CIO

Read more...

Success Drivers in an Outsourcing Relationship

Managing a long-term outsourcing relationship is no easy task and establishing an outsourcing relationship that is both efficient and mutually beneficial may sometimes seem unattainable. Missed deadlines, fixed expenses, work or finished products that don't meet expectations are just a few of the problems that business owners can imagine when they think of outsourcing IT services to an independent contractor. Is that how many of you think of outsourcing? The answer is “no”, if you just take note of the following tips for how to get an outsourcing relationship on the right track.

In order to minimize problems and get better results from outsourced IT projects, here are four things you should do to make the outsourcing relationship work for you:

• Identify which tasks are appropriate to outsource. Make a list of tasks that are routinely performed by you and your employees. Review the list to see which activities might be outsourced: tasks that make good candidates for outsourcing include activities you or your key personnel are doing that are routine and repetitive and taking time away from more important work and tasks that you and your staff don't really have the expertise to do, but aren't needed on a regular basis.

• Systematize repetitive tasks. To get good results when a repetitive task is outsourced, you need to be able to provide the contractor with details about how the work should be done. Take the time to write down the steps you take to complete the work you want done, including enough detail about the steps that need to be completed, methods to be used, recordkeeping that needs to be done, etc. so that a contractor can perform the work the way it would be done in your company.

• Research needs for projects that are beyond your area of expertise before you outsource the work. You won't be able to choose the right contractor for a job and the contractor won't be able to meet your expectations if your expectations aren't reasonable and clear up front. What do you want done? What's your budget? What results do you expect? How do you want the results achieved? What's the time line? What deliverables will you require? Make sure you have clear answers to these questions before the tasks are outsourced.

• Locate and get to know companies and people you might want to use – ahead of time. Check out their websites, check their references, and where appropriate, give them small jobs first. If those are completed satisfactorily, then assign the contractor bigger or more important tasks.

Source: NASDAQ

Read more...