8 Steps to successful IT Client Services re-sourcing at

Waking up from a Service Sourcing Nightmare

Dan Wilson dan.wilson@vw.com

Volkswagen Group of America IT Client Services Manager 248-754-5113HDI Member Advisory Board Past-ChairmanHDI Motown Chapter Advisor

There comes a time with all outsourced services when your current contract or provider is not fulfilling the needs of your organization and you realize that it is time to move on.

In late 2008, nearly a year after I joined Volkswagen Group of America, I was at that

point and took action.

This presentation covers how we took a helpless situation with 1 person and 2 bad contracts into a world class Client Services

department.

Preface

1. Assess the nightmare

2. Find a solid partner

3. Be diligent about the structure of the agreement

4. Define and document your governance structure

5. Select the team members

6. Offer a ninety day grace period for SLA attainment

7. Manage and hold them accountable

8. Continuous review and collaboration

8 Steps to successful re-sourcing

• Review current SLA’s and KPI’s and benchmark

• Deep review of current contract (transition services, staff transition, termination date or clauses, etc.)

• Review customer satisfaction ratings

• Review team/employee satisfaction

• Assess team members for possible transition

#1 - Assess the nightmare

• Create a solid RFP

• Evaluate at least 5 vendors• Industry Evaluation (Gartner Magic Quadrants)

• Do homework on financials of company

• Research sub-contracting practices

• Ensure CORE competency alignment

• Review proposals, RFP response, and SoW’s

• Use scorecard for rating

• Interview top 3-4 vendors

• Contract negotiations with final 2

• Take time to get to know the top 1 or 2!

#2 - Get a solid partner

• Types • Master Contract, T&C’s

• Statement of Work

• Service Certificate

• Terms • Annual renewal

• Multi-year with periodic checkpoints

• Unique/Essential Provisions• Final approval/Interviewing rights for key roles (even under SLA contract)

• Transition of staff members upon termination of contract

• Ownership of processes, documentation, intellectual capital

• Interaction between SLA and Contract labor

• Sub-contracting restrictions

• Underperformance remediation (SIP’s)

• Staff removal rights

• XX% annually price reduction (expected efficiencies)

#3 - Structure of the Agreement

• Who Governs the vendor? And when?• Operational Manager

• Governance Team?

• CTO/CIO

• Metrics, reports, deliverables• Types, frequency, formal/informal

• Monthly Service Review

• QBR’s

• Consider your audience for each...

• Service Improvement Plans

• Penalties

• Contract Management

#4 - Governance Structure

• Your Team• Contractors

• Direct employees

• Governance

• Operational Support

• Process Management

• Their Team• Ask to sit in on interviews for key roles

• VIP Support, Systems Admins, Team Leads, etc.

#5 - Select the Team Members

• What it is?• Good gesture of partnership

• Allows them to get their feet wet

• Makes transition time shorter (save $$$)

• What it is not…

Last thing you want to do is have to penalize a vendor early in the relationship…

#6 - Grace Period for SLA Attainment

• Enforce SLA commitments and SIP’s if necessary

• Maintain meeting cadence• Daily – High Priority issues

• Weekly – Operational/tactical review

• Monthly – Service and KPI Review

• Quarterly – Formal QBR

• Maintain governance structure!

• Enforce penalties and SIP’s if necessary after grace period

#7 - Manage and Hold Accountable

• QBR good time for this activity

• Make Vendor Service/Program Manager be part of your Management team

• Understand what the vendor can provide outside of your contract resources• Consulting, innovation, additional services…

• Don’t look elsewhere until you’ve already asked them!

• Quarterly Team(s) Meeting for Staff to:• Provide business updates from both sides

• Key Successes

• Recognition and Rewards

• Project updates

• Staff questions and concerns

#8 - Continuous Review & Collaboration

1. Assess the nightmare

2. Find a solid partner

3. Be diligent about the structure of the agreement (SoW, Service Certificates, rate cards, penalties for missed KPI, SIP’s, etc.)

4. Define and document your governance structure

5. Select the team members (your side and their side)

6. Offer a ninety day grace period for SLA attainment

7. Manage and hold them accountable (penalize if it is necessary)

8. Continuous review and collaboration

Recap!

• Example RFP document with accompanying documents

• Example RFP review score sheet

• Example service certificate

• Example staffing SoW

• Example separate/master contract (T&C’s)

• Example service governance plan

Takeaways

dan.wilson@vw.com