good outsourcer, bad contract: what performance …...operation, making sure you have the right...
TRANSCRIPT
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Good Outsourcer, Bad Contract: What Performance
and Capacity Planners Need to Know
CA TechnologiesDenise P. Kalm
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With outsourcers playing a larger role in your business
operation, making sure you have the right contract written up
becomes vital to business success. But how do you make this
happen? What needs to be in place to ensure that you get the
service you paid for and expect? Performance and capacity
planners are instrumental in drafting this contract; learn what
you need to know so you can avoid the slough of outsourcer
disillusionment.
Abstract
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My background
Types of outsourcing
Pitfalls
Solutions
Getting in the door
Q&A
Summary
Agenda
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Me
Capacity Planner
Performance Analyst
Programmer
Architect
Liaison
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Why You Outsource
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Applications Systems Datacenter
In-Shore Off-Shore
Types of Outsourcing
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Application
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Systems
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Datacenter
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InShore versus Offshore
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Pitfalls
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Application
OCO?
Design?
Visibility
Scalability?
Tools?
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System
Reporting
Design?
Visibility
SLAs
Terminology
Expertise
Competitors
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Skill Set Objectivity Prices
Reputation Termination
Datacenter - anywhere
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Datacenter - offshore
Infrastructure
Culture
Site Visits U.S. Visits
Language
Security Geopolitics
Time zones
Labor Backlash
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Know the Studies
http://www.outsourcing-best-practices.com/failures.html
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Opportunities
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Get referencesDetermine SLAs
and measurement rules
Define pricing models
Define incentives and penalties
Develop a performance
contract
Doing it Right
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Objectives
Know what you want Know who can deliver it Know how to measure it Know how long it will take to create, deliver, convert….
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System Availability
Response Time
Tape Mount Response Time
Scheduled Batch Production Complete
Demand Batch Processing Initiation
Performance Standards
David L. Hayes – Fenwick and West, LLP
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“Because the Client’s IS services are typically being rendered, prior to outsourcing to the Vendor, on a very different equipment configuration, with very different economies of scale, the existing performance measurements and costing the Client has been using to manage the operations may need to be significantly redefined in the outsourcing agreement. Definition of performance measurements may require significant negotiation, as the Client will typically be accustomed only to the performance measurements and costing models that it has previously used in its business, which may bear little relation to the range of performance measurements and costing models the Vendor will wish to use.”
Sample Legal Verbiage
David L. Hayes
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Earn-back provision
Weighting of performance standards
Service Level Penalties
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ID
• Define risks• Ex. Lack of resources, schedules, communication,
culture
Analyze
• Quantify each risk for cost and likelihood• Create plan to address each risk
Manage
• Track issues as they arise• Monitor for new and known risks
Risk Management
P. Venkat, CEO Vital Link Corpt
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Relationship Management
Stan Lepeak, Mgmt Director of Research, Equa Terra
“The work isn’t done when the deal is done; you have to manage the ongoing
relationship.”
“You need to spend 5% of more (of yearly cost) managing the relationship to assure
happiness.”
“You are outsourcing the work; you’re not outsourcing the responsibility that the work is
performed well.”
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Communicate
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Clearly define terms upfront
Define termination rights and procedures
Insist on legal review
Plan for the End
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Q &A
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Plan
Contract
Implement
Measure
Assess
Summary
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Failing to plan is planning to fail.
Alan Lakein
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Adventure is just bad planning.
Roald Amundsen