Outsourcing Methodology

Industry Standard
Outsourcing
Methodology
Outsourcing Model

Draft 0.5b

Prepared by:
Venugopal
Ramanathan

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IT SERVICE PROVIDER Outsourcing Methodology..........................................................3

Generate Target.......................................................................................................................4

Qualify Target.........................................................................................................................6

Qualify Prospect......................................................................................................................9

Getting Short-listed...............................................................................................................11

Develop Proposal..................................................................................................................14

Negotiation............................................................................................................................20

Due Diligence........................................................................................................................23

Transition..............................................................................................................................27

10 Transformation.....................................................................................................................32

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1
1.1

IT SERVICE PROVIDER Outsourcing Methodology

This document

Chapter 1 is a place holder for the other dimensions of the IT SERVICE PROVIDER Outsourcing
Methodology, i.e. principles, rules, roles and responsibilities, measures, tools, supporting structures, CIP
process. Etc
Chapters 2-10 describes the stages and sub-processes involved in outsourcing deals. This process model
is divided into 9 logical stages. The tasks and activities defined in these stages can overlap one another to
some extent and there will possibly be a number of iterations before a stage can be finally completely.

1.2

Market differentiators

Showing a clearly defined process for managing outsourcing risks

1.3

Dependencies

The TOTAL OUTSOURCING DIVISION business plan

1.4

Terminology

Word
Methodology
Process
Total Outsourcing
Selective
Outsourcing

1.5

1.6

Definition

A set or system of methods, principles, and rules for regulating a given

discipline
A systematic series of actions directed to some end
Total outsourcing is the transfer of more than 79% of the customers
information service functions to the vendor.
Selective outsourcing is the transfer of one or a few selected information
service functions to the vendor.

Guiding outsourcing principles

Both the prospect and IT SERVICE PROVIDER should ideally have small, dedicated teams
Superfluous internal knowledge transfer should be avoided were possible

Roles, responsibilities and functions

Marketing Executive
Sales Executive
Sales Manager
New Business Manager (ASM new)
Operations Implementation Consultant
Technical Consultant architects
Technical Consultant developer
Financial Consultant
Legal Consultant
HR Consultant
ASM (ASM installed)
Account Operations Manager
Business Manager
IT SERVICE PROVIDER Executives
FOM
Delivery Manager

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Generate Target

2.1

Objectives

To supply our sales force with a list of target companies to pursue for initial qualification. This list will be
supplemented with the information gathered during this stage.

2.2

Dependencies

Tracking of changes in TOTAL OUTSOURCING DIVISION strategy and target segments definition
Both local and world-wide strategies.

2.3

Key Performance Indicators

Size of funnel
Walk away ratio
Win/loss ratio

2.4 Key roles

2.4.1 Stage Owner
Marketing Executive

2.4.2

Contributors

Sales Executive, Sales Manager, TOTAL OUTSOURCING DIVISION WW Marketing

2.5

Input
TOTAL OUTSOURCING DIVISION Business strategy determining our target markets
Top 5000 companies list

2.6

Output (qualified and measurable)

Individual organisations qualified by Marketing as matching the base criteria
List of target customers
All information gathered so far about each target customer (Structured).

2.7

Sub-Processes

The sub-processes in this Stage are:

Define Localised Target Segment Criteria
Define Localised Target List
Each of these sub-processes is outlined in the following paragraphs.

2.7.1

Define Localised Target Segment Criteria

Definition
Based on the WW TOTAL OUTSOURCING DIVISION target segments and local market information,
generate a list of localised (country/region-specific) base criteria to define target segments
Input
TOTAL OUTSOURCING DIVISION Business strategy (determining our target markets)
Local market information (customer needs, market size, competition, etc.)
Output
Localised Criteria List defining the target segments

2.7.2

Define Localised Target List

Definition
This sub-process will combine the list of top 5000 customers per country with the Localised Criteria
List to compile data which will be used to create the localised target list.
Input
Localised Criteria List
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Output
Individual organisations qualified by Marketing as matching the base criteria
List of target customers
All information gathered so far about each target customer (Structured).

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Qualify Target

At this Stage, an organisation has already been identified by the Marketing and Sales functions as
matching a set of basic criteria such that it is an appropriate target for initial sales contact. Note that
market generated RFPs, as well as leads from all other sources, must still go through an initial Marketing
and sales qualification process before progressing to the next stage. As the next Stage, Qualify
Prospect, requires some real investment in pre-sales effort (and cost), only target organisations with a
real prospect of becoming customers should progress beyond the Prospect Stage.

3.1

Objectives

To further qualify the target organisation through sales and marketing contact, such that unless
demonstrable interest can be generated in outsourcing generically, in IT SERVICE PROVIDER's
outsourcing offerings specifically and starting a process that may lead to outsourcing the target will be
excluded from further attention. Our primary objective through this process is to thoroughly qualify the
Target Company so that they can become a formal prospect.

3.2

Dependencies
There must be a clearly defined set of basic criteria (specific to each country, where necessary)
A sales and marketing organisation responsible for qualifying all leads acquired against these criteria.

3.3

Key Performance Indicators

Win/loss ratio
Walk away ratio
Percentage of captive leads (sole supplier)

3.4 Key roles

3.4.1 Stage Owner
Sales Executive

3.4.2

Contributors

Marketing Executive, Sales Manager, Business Manager

3.5

Input
Individual organisations qualified by sales and marketing as matching the base criteria for targeting
with initial sales effort.

3.6

Output (qualified and measurable)

Individual organisations re-qualified by Sales as matching the base criteria for targeting with initial
sales effort, and having expressed an interest in outsourcing generically, in IT SERVICE
PROVIDER's proposition specifically, and in starting a process that may lead to the award of one or
more outsourcing contracts

3.7

Sub-Processes

The sub-processes in this Stage are:

Confirm Basic Research
Initiate Sales Contact
Promote Outsourcing
Introduce Proposition
Qualify Interest
Each of these sub-processes is outlined in the following paragraphs.

3.7.1

Confirm Basic Research

Definition
This sub-process revisits the information used by Marketing to qualify the organisation as a prospect,
seeking to confirm that it is accurate, current and complete. In the event that there prove to be significant
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variances between reality and the information relied upon in targeting, the organisation should be rejected
and returned to Marketing for re-qualification.
Input
Individual organisations qualified by Marketing as matching the base criteria
Output
Individual organisations re-qualified by Sales as matching the base criteria for targeting with initial
sales effort.

3.7.2

Initiate Sales Contact

Definition
This sub-process designs and executes a sales strategy that delivers contact with and subsequently
access to decision makers and/or decision influencers in the target organisation.
Input
Individual organisations re-qualified by Sales as matching the base criteria for targeting with initial
sales effort.
Output
Active sales contact with decision-makers and/or decision influencers in the target organisation.
A plan as to how to proceed forward with the account, i.e. Call plan.

3.7.3

Promote Outsourcing

Definition
This sub-process delivers information relevant to the target organisation that presents outsourcing to the
sales contacts in a favourable light.
Input
Collateral materials that deliver information relevant to the target organisation that presents
outsourcing in a favourable light.
Output
The customer decision makers and/or decision influencers informed as to the potential benefits of
outsourcing to their organisation and are expressing interest for further input.

3.7.4

Introduce Proposition

Definition
This sub-process informs the customers decision-makers and/or decision influencers about IT SERVICE
PROVIDER's outsourcing proposition in such a way that it credibly promises to deliver the specific
outsourcing benefits promoted in 2.6.3 above.
Input
Collateral materials that inform sales contacts about IT SERVICE PROVIDER's outsourcing
proposition in such a way that the specific benefits promoted in 2.6.3 seem likely to be delivered.
Output
Sales contacts informed as to the suitability of IT SERVICE PROVIDER's outsourcing proposition to
their organisation's needs.

3.7.5

Qualify Interest

Definition
This sub-process elicits feedback and additional information from the customers decision makers. This
information will be used to determine if there is significant interest on the part of the customer in IT
SERVICE PROVIDERs specific outsourcing benefits promote in 2.6.3 above.
Input
Customer feedback regarding the outsourcing services and benefits promoted in 2.6.3
Responses to questions and additional information to further qualify if there is true interest, desire, and
capability to deliver the specific outsourcing benefits promoted in 2.6.3 above.

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Output
Sales contacts qualified as to the suitability of IT SERVICE PROVIDER's outsourcing proposition to
their organisation's needs.

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Qualify Prospect

At this Stage, sales contacts within an organisation have expressed their interest in outsourcing generally,
in IT SERVICE PROVIDER's outsourcing proposition specifically, and in starting a process that may
lead to outsourcing contracts being awarded.

4.1

Objectives

The objectives of this stage are to:

qualify the prospect for the major pre-sales investment (that an outsourcing proposal represents)
develop a deal strategy (i.e. identify a specific solution sub-set that will form the basis of a proposal)
and a deal plan (showing the nature, volume, timing and cost of resourcing a deal from this point to
completion)
persuade the prospect to initiate a process intended to award one or more outsourcing contracts

4.2

Dependencies

Completion of the previous stage.

Sales team having the required skill set to effectively assess and qualify customers situation.

4.3

Key Performance Indicators

Walk away ratio

Weighted funnel
Win/loss ratio

4.4 Key roles

4.4.1 Stage Owner
Sales Executive

4.4.2

Contributors

Marketing Executive, Sales Manager, Business Manager, IT SERVICE PROVIDER Executive, Technical
Consultant architects

4.5

Input
Individual organisations re-qualified by Sales as matching the base criteria for targeting with initial
sales effort
Individual organisations having expressed an interest in outsourcing generically, in IT SERVICE
PROVIDER's proposition specifically
Individual organisations in starting a process that may lead to the award of one or more outsourcing
contracts.

4.6

Output (qualified and measurable)

Organisations who have initiated formal outsourcing processes qualified for the major pre-sales
investment
A deal strategy and deal plan, inclusive of a description of our intended final solution for the
customer. (The final solution will be key to develop the transformation stage as well as to potentially
negotiate subsequent projects in a later stage.)

4.7

Sub-Processes

Qualification assessment
Deal strategy
Generate Outsourcing Process

4.7.1

Qualification assessment

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Definition: This process entails collecting a broad range of customers information and assessing and
summarising it according to a defined set of qualification criteria.
Inputs
Individual organisations re-qualified by Sales as matching the base criteria for targeting with initial
sales effort
Individual organisations having expressed an interest in outsourcing generically, in IT SERVICE
PROVIDER's proposition specifically
Individual organisations in starting a process that may lead to the award of one or more outsourcing
contracts.
Outputs
Customer summary assessment

4.7.2

Deal Strategy

Definition
Converts all previously gathered information concerning the customer and internal capabilities into a
formal deal or Proposal strategy. A business case will be drawn up and measured against TOTAL
OUTSOURCING DIVISION business objectives. Following the acceptance of this, a deal strategy and
deal strategy implementation will be created and internally reviewed
Inputs
Customer summary assessment
Competitive information
Partnership information
Outputs
Business case information
Resource plan

4.7.3

Generate Outsourcing Process

Definition
This sub-process persuades sales contacts within the target organisation to start a formal process with
the intent of awarding one or more contracts.
Input
Organisations qualified for deal pursuit investment.
Output
Organisations with formal outsourcing processes started.

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Getting Short-listed

At this Stage, sales contacts within the target organisation have initiated a process designed to result in
the award of one or more outsourcing contracts, and IT SERVICE PROVIDER has decided to invest in
winning one or more of the contracts to be awarded.

5.1

Objectives

To demonstrate, to the prospect, IT SERVICE PROVIDER's qualifications to meet the customers

requirements and hence, to secure IT SERVICE PROVIDER's participation in the outsourcing selection
process.
NB: On some occasions, prospects will include IT SERVICE PROVIDER in the process without either a
formal or an informal Qualification.

5.2

Dependencies

Completion of the previous stage.

5.3

Key Performance Indicators

Win/loss ratio
Pre-sales actual cost against budgeted cost

5.4 Key roles

5.4.1 Stage Owner
Sales Executive

5.4.2

Contributors

Marketing Executive, Sales Manager, IT SERVICE PROVIDER Executive

5.5

Input
Organisations qualified for the major pre-sales investment that an outsourcing proposal represents
that have initiated formal outsourcing processes, together with a deal strategy and a deal plan.

5.6

Output (qualified and measurable)

IT SERVICE PROVIDER selected as a participant in the prospect's outsourcing process.

5.7

Sub-Processes

The sub-processes in this Stage are:

Analyse Customer Requests
Develop Response Concept
Create Response
Present Response
Satisfy Queries
Each of these sub-processes is outlined in the following paragraphs.

5.7.1

Analyse Customer Requests

Definition
In a formal process, the customer will issue a document defining the information they require in order to
qualify potential suppliers to participate in the process, and IT SERVICE PROVIDER will be expected to
respond fully to this request. In an informal process, the customer will still communicate a need to
qualify IT SERVICE PROVIDER as a potential supplier, and IT SERVICE PROVIDER will have to
provide appropriate responses. The first step to satisfying the customer's qualification criteria is to
develop a detailed understanding of what the customer is seeking, and to deduce their underlying
expectations. This detailed understanding can only be attained by carefully analysing the customer
communications that set out their qualification requirements.

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Input
Customer communications setting out qualifications expectations, either formally in documents or
informally in sales contact reports.
Output
A documented and detailed understanding of the customer's qualification requirements.

5.7.2

Develop Response Concept

Definition
The analysis defined in 4.6.1 above provides the basis for developing a concept for responding to the
customer's qualification requirements. There will, of course, be a basic need to provide at least all of the
facts required. However, that is only one element of the response. To be successful, it must create the
right set of emotional reactions in the customer, and this means that it must present the facts in a way
most likely to appeal to the customer. The response concept describes how this will be achieved.
Input
A documented and detailed understanding of the customer's qualification requirements.
Output
A detailed description of how the customer's qualification requirements will be satisfied, including
presentational and cultural expression aspects of the response.

5.7.3

Create Response

Definition
This process takes the Response concept and the requested facts and creates a detailed response
document.
Input
A detailed description of how the customer's qualification requirements will be satisfied, including
presentational and cultural expression aspects of the response, together with all facts necessary to
populate the response.
Output
A formal and structured response document that satisfies the customer's qualification requirements.

5.7.4

Present Response

Definition
An opportunity should be sought to present the response to the customer (many customer processes offer
such opportunities, but those that don't can usually be directed to do so).
Input
A formal and structured response document that satisfies the customer's qualification requirements
Output
A successful presentation to of the qualification response to the customer.
List of queries from the customer

5.7.5

Satisfy Queries

Definition
Following on from both the response document and the presentation, the customer may have queries
concerning either facts or culture, and satisfying these queries presents an opportunity to consolidate the
impressions already made or to course correct if there is feedback indicating negative responses.
Input
List of queries from the customer
Output
Answers improving IT SERVICE PROVIDER's sales leverage on the customer

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Develop Proposal

At this Stage, the prospect has requested proposals for outsourcing solutions, and has provided significant
(often voluminous) information to assist in their preparation. IT SERVICE PROVIDER has decided to
pursue the opportunity, and has been awarded the opportunity to participate in the process.

6.1

Objectives

To be selected as (a) preferred supplier with whom to negotiate a detailed service contract.

6.2

Dependencies

Completion of the previous stage.

6.3

Key Performance Indicators

Win/loss ratio
Pre-sales actual cost against budgeted cost

6.4 Key roles

6.4.1 Stage Owner
New Business Manager (ASM new)

6.4.2

Contributors

Marketing Executive, Sales Executive, Sales Manager, Operations Implementation Consultant, Technical
Consultant architects, Financial Consultant, Legal Consultant, HR Consultant, Business Manager, FOM,
Delivery Manager

6.5

6.6

6.7

Input
IT SERVICE PROVIDER selected as a participant in the prospect's outsourcing process
Prospect has provided significant (often voluminous) information to assist in their preparation

Output (qualified and measurable)

IT SERVICE PROVIDER selected as (a) preferred supplier and invited to progress through to the
Negotiation stage
Letter of commitment

Sub-Processes

The sub-processes in this Stage are:

Establish Proposal Team
Requirement Management
Analyse Customer Requests
Analyse Customer Projects
Capture Assumptions
Develop Proposal Concept
Develop Solution Design
Develop Work Break Down Structure
Develop Project Risk Mitigation Plan
Develop Proposal Pricing
Develop Management of Organisational Change Plan
Develop Due Diligence Plan
Develop Transition Plan
Develop Service Delivery Plan
Develop Transformation Plan
Proposal Production
Develop Framework Contract
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Present Proposal (iterative)

Respond to Questions (iterative)
Refine Proposal (iterative)
Each of these sub-processes is outlined in the following paragraphs.

6.7.1

Establish Proposal Team

Definition
A proposal team must be established that is capable of participating in the customer's selection process
and securing a win for IT SERVICE PROVIDER. The composition of the team will be determined by the
Deal Strategy and Deal Plan developed during the Opportunity stage.
Input
Completed Opportunity stage. (As defined in 6.5)
Output
An established Proposal Team comprising all the resource required to secure a successful outcome.

6.7.2

Requirement management

Definition
?
Input
?
Output
?

6.7.3

Analyse Customer Requests

Definition
The customer will issue a document defining the services they are interested in outsourcing and their
performance requirements in respect of those services, and inviting qualified potential suppliers to make
proposals, and IT SERVICE PROVIDER will be expected to respond fully to this request. The first step
to satisfying the customer's request for a proposal is to develop a detailed understanding of what the
customer is seeking, and to deduce their underlying expectations, this includes not only the customers
management team requirements but also the IT organisation and the end users of the services. This
detailed understanding can only be attained by carefully analysing the customer communications that set
out their requirements.
Input
Customer communications, setting out requirements for a proposal.
Output
A documented and detailed understanding of the customer's requirements. This includes specific
references to the understanding of all their resources, assets and services currently used to support the
equivalent of the requested services.

6.7.4

Analyse Customer Projects

Definition
There are often a number of projects currently in progress when an outsourcing deal is signed. We have to
locate these projects and ensure that we have taken these into all related issues into account when
designing the proposal and solution design.
Input
Customer communications
Output
Extensions to the Assumption Document, dependencies list and the risk list

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6.7.5

Capture Assumptions

Definition
All assumptions that serve as a basis for the proposal will be captured in writing in the Assumptions
Document. This document will be reviewed with, and approved by, the Customer and will be a reference
for subsequent project planning and SLA development. Assumptions will be gathered, adapted and used
throughout the life cycle of an outsourcing deal. It is however especially critical that the major ones are
confirmed by the customer before the proposal is presented.
Input
Potentially any customer
Output
Assumptions Document (that clearly defines the all assumptions)

6.7.6

Develop Proposal Concepts

Definition
The analysis defined in Analyse Customer Requests above provides the basis for developing a concept
for responding to the customer's requirements. There will, of course, be a basic need to develop a
proposal that meets all of the requirements. However, that is only one element of the response. To be
successful, it must create the right set of emotional reactions in the customer, and this means that it must
present solutions in a way most likely to appeal to the customer. The proposal concept describes how this
will be achieved. It is critical that one ensures that the Proposal will not hinder the attainment of the final
business solution as defined in the earlier stages.
Input
A documented and detailed understanding of the customer's requirements.
A deal strategy and deal plan, inclusive of a description of our intended final business solution for the
customer.
Output
A detailed description of how the customer's requirements will be satisfied including presentational
and cultural expression aspects of the response.

6.7.7

Develop Solution Design

Definition
The development of the solution design is the central part of the Proposal and consists of the following
tasks:
Develop Project Risk Mitigation Plan: (the output of this task is an internal document that
highlights the risks related to this project and defines mitigating actions to manage those risks)
Develop a Work Break Down Structure: (the output of this task is the is the work break down
which defines the component projects that together define the structure of the overall design)
Develop Proposal Pricing
Develop Management of Organisational Change Plan: Management of Organisational Change is
one of the most critical sub-projects. At this stage the document that highlights the MOC
requirements from the Customer point of view, is created. Input will come from both the User
Community as well as the Customers IT Community. (If a detail MOC process is required, it will
most probably be included in a specific project that runs in parallel and complements the transition
project).
Input
Customer communications, setting out requirements for a proposal
Customer requirements document. Assumptions document, deal strategy, deal plan and financial
related information (resource costs, up-lifts,)
Output
Work Break Down Structure

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Financial document with resources and costs plans (contact Samantha Basso of IT SERVICE
PROVIDER France for tools)
First highlight of the MOC requirements in order to support the proposal

6.7.8

Develop Due Diligence Plan

Definition
?
Input
?
Output
?

6.7.9

Develop Transition Plan

Definition
The transition plan defines the implementation requirements and tasks for the Transition Stage. At this
point in time, it consists of a definition of all high level tasks needed (for one or multiple projects) to
accomplish a Smooth transition. In addition to this the elapse times are calculated in order to plan the
resource requirements for Transition.
As a subset of the transition plan the Service Delivery Plan must be developed here.
Input
Customer request documents
Assumptions document.
Results of the solution design sub-process
Output
Transition Plan

6.7.10 Develop Transformation Plan

Definition
The transformation plan defines the implementation requirements and tasks for the Transformation Stage.
At this point in time, it consists of a definition of all high level tasks needed to ensure a Smooth
transformation.
Input
Customer request documents
Assumptions document.
Results of the solution design sub-process
Transition Plan
Output
Transformation Plan

6.7.11 Proposal Production

Definition
?
Input
?
Output
?

6.7.12 Create Proposal (replaced by Develop solution design & Proposal Production)
Definition
This process takes the proposal concept and the customer's requirements and creates a detailed proposal
document.

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Input
A detailed description of how the customer's requirements will be satisfied, including presentational
and cultural expression aspects of the proposal, together with all facts necessary to populate the
proposal.
Output
A formal and structured proposal document that satisfies the customer's requirements.

6.7.13 Develop Framework Contract

Definition
?
Input
?
Output
?

6.7.14 Present Proposal

Definition
After the proposal has been submitted to the customer, there will be a requirement to present the proposal
to the customer. This is an opportunity to achieve two basic goals.
1. To sell IT SERVICE PROVIDER's solution, values and culture
2. To confirm our understanding of the customers business requirements and to gather feedback on his
assessment of our solution inclusive of our: assumption, risks and their mitigation activities, etc
This sub-process is a critical component of the outsourcing process.
Input
A completed proposal delivered to the customer.
Output
A completed presentation delivered to the customer.

6.7.15 Respond to Questions

Definition
Following on from both the proposal document and the presentation, the customer may have queries
concerning either facts or culture, and satisfying these queries presents an opportunity to consolidate the
impressions already made or to course correct if there is feedback indicating negative responses.
Input
Queries from the customer
Output
Answers improving IT SERVICE PROVIDER's sales leverage on the customer

6.7.16 Refine Proposal

Definition
Following detailed evaluation of the response, the customer will reject some proposals completely and
exclude the vendors that offered them, but may require significant changes even to those proposals that
are not rejected. This is the final opportunity to win selection as (a) preferred supplier and is therefore a
critical component of the outsourcing process.
Input
Proposal
Customer feedback on proposal
Output
Repositioned proposal

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Negotiation

At this Stage, IT SERVICE PROVIDER has been selected as (a) preferred supplier with whom
negotiations for the award of one or more outsourcing contracts will be undertaken.

7.1

Objectives

The objective is to be awarded contracts for outsourcing services, subject to Due Diligence.

7.2

Dependencies

Completion of the previous stage.

7.3

Key Performance Indicators

Win/loss ratio
Risk coefficient, margin variance

7.4 Key roles

7.4.1 Stage Owner
New Business Manager (ASM new)

7.4.2

Contributors

Sales Executive, Sales Manager, Operations Implementation Consultant, Technical Consultant architects,
Financial Consultant, Legal Consultant, HR Consultant, ASM (ASM installed), Account Operations
Manager, Business Manager
FOM, Delivery Manager

7.5

Input
IT SERVICE PROVIDER selected as (a) preferred supplier and invited to progress through the
Negotiation stage

7.6

Output (qualified and measurable)

Contract(s) awarded to IT SERVICE PROVIDER for outsourcing. (subject to Due Diligence)

7.7

Sub-Processes

The sub-processes in this Stage are:

Establish Negotiation Team
Negotiate People
Negotiate Assets
Negotiate Contracts
Negotiate Services
Negotiate Change Mgmt Process
Negotiate Customer Projects
Negotiate Miscellaneous
Negotiate Terms & Conditions
Refine Proposal
Each of these sub-processes is outlined in the following paragraphs.

7.7.1

Establish Negotiation Team

Definition
A negotiation team must be established that is capable of securing a contract for IT SERVICE
PROVIDER featuring appropriate terms and conditions. The composition of the team will be determined
by the nature of the opportunity, and will have been identified in the Deal Strategy and Deal Plan
developed as outputs from the Opportunity stage.
Input
Deal Strategy and Plan, completed Develop Proposal stage.
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Output
An established negotiation team properly constituted to secure an optimal contract.

7.7.2

Negotiate People

Definition
This sub-processes covers the negotiation of all people-related issues.
Input
People elements of the proposal, legal constraints, customer requirements, employee concerns.
Output
Agreed position on all people-related issues.

7.7.3

Negotiate Assets

Definition
This sub-processes covers the negotiation of all asset-related issues.
Input
Asset elements of the proposal, commercial constraints, customer requirements.
Output
Agreed position on all asset-related issues.

7.7.4

Negotiate Contracts

Definition
This sub-processes covers the negotiation of all contracts-related issues (contracts here means all thirdparty agreements, including for example software licences, maintenance contracts, consumable supplies).
Input
Contracts elements of the proposal, commercial constraints, customer requirements, and third party
concerns.
Output
Agreed position on all contracts-related issues.

7.7.5

Negotiate Services

Definition
This sub-process covers all services-related issues (for example, service level agreements and
performance targets, service delivery plan).
Input
Services elements of the proposal, legal constraints, customer requirements, SLAs.
Output
Agreed position on all services-related issues.

7.7.6

Negotiate Customer Projects

Definition
This sub-process covers all projects-related issues (live or committed-to-start projects impacting the
services contained within the scope of the contracts awarded).
Input
Projects elements of the proposal, customer requirements.
Output
Agreed position on all projects-related issues.

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7.7.7

Negotiate Relationships

Definition
This sub-process covers all relationships-related issues (for example, where IT SERVICE PROVIDER's
ability to perform the services obligations is critically dependent on a relationship between the customer
and a third party)
Input
Relationships elements of the proposal, third party constraints, customer requirements
Output
Agreed position on all relationships-related issues

7.7.8

Negotiate Miscellaneous

Definition
This sub-process covers all aspects of the contract scope not explicitly covered in the preceding
paragraphs.
Input
Miscellaneous elements of the proposal, customer requirements.
Output
Agreed positions on all miscellaneous issues.

7.7.9

Negotiate Terms & Conditions

Definition
This sub-process covers the legal and commercial terms and conditions governing the contract.
Input
Terms and Conditions elements of the proposal, legal constraints, commercial constraints, customer
requirements.
Output
Agreed terms and conditions

7.7.10 Refine Proposal

Definition
Following detailed negotiation and evaluation of the response, there will almost certainly be refinement
required to make to the original proposal, this is the point in time to do this.
Input
Proposal
Output from all the negotiations
Output
Repositioned proposal

7.7.11 Contract Production

Definition
?
Input
?
Output
?

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Due Diligence

At this Stage, IT SERVICE PROVIDER has secured one or more contracts for outsourcing.

8.1

Objectives

The objective is to confirm that the facts underlying the proposal and to renegotiate terms wherever
appropriate.

8.2

Dependencies

Completion of the previous stage.

8.3

Key Performance Indicators

Performance against plan

Nr of errors found during transition

8.4 Key roles

8.4.1 Stage Owner
Account Operations Manager

8.4.2

Contributors

Sales Executive, New Business Manager (ASM new), Operations Implementation Consultant, Technical
Consultant architects, Technical Consultant developer, Financial Consultant, Legal Consultant, HR
Consultant, ASM (ASM installed), Delivery Manager

8.5

Input
Contract(s) awarded to IT SERVICE PROVIDER for outsourcing.

8.6

Output (qualified and measurable)

Confirmed and, if necessary, repositioned outsourcing contracts and schedules

8.7

Sub-Processes

The sub-processes in this Stage are:

Establish Due Diligence Team
Confirm People
Confirm Assets
Confirm Financials
Confirm Contracts
Confirm Services
Confirm Customer Projects
Confirm Relationships
Negotiate Variances
Refine Proposal
Each of these sub-processes is outlined in the following paragraphs.

8.7.1

Establish Due Diligence Team

Definition
A due diligence team must be established that is capable of confirming that the assumptions and data
underlying the contracts as written are correct, or identifying and quantifying areas of divergence. The
composition of the team will be determined by the nature of the opportunity, and will have been identified
in the Deal Strategy and Deal Plan developed as outputs from the Opportunity stage.
Input
Contracts and schedules as written, Deal Strategy and Deal Plan from Opportunity stage.

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Output
A due diligence team capable of minimising IT SERVICE PROVIDER's error-related commercial
risk.

8.7.2

Confirm People

Definition
This sub-process reviews contractual commitments on people and the assumptions underlying those
commitments against the reality as discovered by detailed investigation of the facts, highlights areas of
divergence and recommends how those areas of divergence should be resolved through contractual
change.
Input
The Contracts and their associated schedules as they relate to people, together with access to the
customer's underlying data concerning people.
Output
Confirmation of people aspects of the contract and highlighted areas of divergence with
recommended solutions.

8.7.3

Confirm Assets

Definition
This sub-process reviews contractual commitments on assets and the assumptions underlying those
commitments against the reality as discovered by detailed investigation of the facts, highlights areas of
divergence and recommends how those areas of divergence should be resolved through contractual
change.
Input
The Contracts and their associated schedules as they relate to assets, together with access to the
customer's underlying data concerning assets.
Output
Confirmation of assets aspects of the contract, and highlighted areas of divergence with
recommended solutions.

8.7.4

Confirm Financials

Definition
.
Input
.
Output
.

8.7.5

Confirm Contracts

Definition
This sub-process reviews contractual commitments on contracts and the assumptions underlying those
commitments against the reality as discovered by detailed investigation of the facts, highlights areas of
divergence and recommends how those areas of divergence should be resolved through contractual
change.
Input
The Contracts and their associated schedules as they relate to contracts, together with access to the
customer's underlying data concerning contracts.
Output
Confirmation of contracts aspects of the contract, and highlighted areas of divergence with
recommended solutions.

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8.7.6

Confirm Services

Definition
This sub-process reviews contractual commitments on services and the assumptions underlying those
commitments against the reality as discovered by detailed investigation of the facts, highlights areas of
divergence and recommends how those areas of divergence should be resolved through contractual
change.
Input
The Contracts and their associated schedules as they relate to services, together with access to the
customer's underlying data concerning services.
Output
Confirmation of services aspects of the contract, and highlighted areas of divergence with
recommended solutions.

8.7.7

Confirm Customer Projects

Definition
This sub-process reviews contractual commitments on projects and the assumptions underlying those
commitments against the reality as discovered by detailed investigation of the facts, highlights areas of
divergence and recommends how those areas of divergence should be resolved through contractual
change.
Input
The Contracts and their associated schedules as they relate to projects, together with access to the
customer's underlying data concerning projects.
Output
Confirmation of projects aspects of the contract, and highlighted areas of divergence with
recommended solutions.

8.7.8

Confirm Relationships

Definition
This sub-process reviews contractual commitments on relationships and the assumptions underlying those
commitments against the reality as discovered by detailed investigation of the facts, highlights areas of
divergence and recommends how those areas of divergence should be resolved through contractual
change.
Input
The Contracts and their associated schedules as they relate to relationships, together with access to
the customer's underlying data concerning relationships.
Output
Confirmation of relationships aspects of the contract, and highlighted areas of divergence with
recommended solutions.

8.7.9

Negotiate Variances

Definition
This sub-process takes the areas of divergence and recommended solutions highlighted by the
confirmation sub-processes above, and using them as input negotiates appropriate changes to the
contracts.
Input
The outputs from the confirmation sub-processes above.
Output
A revised and final set of Contracts and their associated schedules.

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8.7.10 Refine Proposal

Definition
Following detailed Due Diligence and evaluation of the response, again there will almost certainly be
refinement required to make to the original proposal, this is the point in time to do this. As sub-tasks to
this process are the following activities:
Re-align Solution Design and Project Scope
Re-align project risks and their mitigation
Re-align assumptions document
Re-align financial document (resources and costs plans)
Input
Proposal
Output from Due Diligence Stage
Output
Repositioned proposal

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Transition

At this Stage, IT SERVICE PROVIDER has secured and confirmed the detailed schedules to outsourcing
contracts with the customer. However, these contracts will be subject to the satisfactory completion of
the Transition Stage. Transition is the transfer of responsibility for the services included within scope,
basically on an 'as is' basis, but can also include limited change to the tools and processes being used to
deliver those services. Never the less, the main focus of the transition stage is to transfer the existing
services and the relocation of assets and people to facilitate this.

9.1

Objectives

The objectives of transition are to:

Facilitate the transfer of accountability of all elements included in the scope of the contracts from the
customer to IT SERVICE PROVIDER
Secure customer sign-off that transition has completed satisfactorily and that the contracts are now
perfected
Secure internal IT SERVICE PROVIDER confirmation of being capable of supporting the related
SLA level.

9.2

Dependencies

Completion of the previous stage.

9.3

Key Performance Indicators

Performance against plan

Achievement of service levels

9.4 Key roles

9.4.1 Stage Owner
Operations Implementation Consultant

9.4.2

Contributors

Sales Executive, Technical Consultant architects, Technical Consultant developer, Financial Consultant,
Legal Consultant, HR Consultant, ASM (ASM installed), Business Manager, IT SERVICE PROVIDER
Executive, FOM, Delivery Manager

9.5

9.6

Input
Confirmed and, if necessary, repositioned outsourcing contracts and schedules and project plans from
previous stages.

Output (qualified and measurable)

Customer sign-off that Transition has completed satisfactorily
Service delivery according to the SLAs

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9.7

Sub-Processes

The sub-processes in this Stage are:

Establish Transition Team
Implement Management of Organisational Change Plan
Establish Account Framework
Implement Service Delivery Plan
Implement Technical Plan
Implement Integration Plan
Escalation Management
Commercial Tracking
Transfer People
Transfer Assets
Transfer Contracts
Transfer Services
Transfer Projects
Transfer Relationships
Each of these sub-processes is outlined in the following paragraphs.

9.7.1

Establish Transition Team

Definition
A transition team must be established that is capable of completing the transfer of responsibilities for the
services included in the scope of the contracts to the customer's satisfaction and in accordance with
contractual obligations. The composition of the team will be determined by the nature of the opportunity,
and will have been identified in the Deal Strategy and Deal Plan developed as outputs from the
Opportunity stage.
Input
Contracts and schedules as written
Deal Strategy and Deal Plan from Opportunity stage.
Transition plan.
Output
A transition team capable of completing the transfer of responsibilities for the services included in the
scope of the contracts to the customer's satisfaction and in accordance with contractual obligations.
Transition plan updated with named resources.
Roles and responsibilities document on deal basis. (NB: Tool in FocusPm)
Contact list (IT SERVICE PROVIDER as well as Customer for both last documents).

9.7.2

Establish Account Framework

Definition
This sub-process defines the following tasks; account start-up, organisational mapping between IT
SERVICE PROVIDER and our customer, set up all the component sub-projects, hands over of the lead
from the negotiating team to the transition team, setting up of report structure between customer and IT
SERVICE PROVIDER.
Input
?
Output
?

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9.7.3

Implement Service Delivery Plan

Definition
This sub-process refines the to-be delivered services to the most detailed level and implements the plan
defined earlier in the Proposal Stage. Through use of the SLA creation Package
Input
The contracts and their associated schedules as they relate to services, in conjunction with access to
the customer's underlying data concerning services.
Output
SLA document

9.7.4

Implement Technical Plan

Definition
This sub-process implements the tasks defined in the Transition plan. It also regularly reviews the
progress and takes the necessary adaptive/corrective actions to satisfy the agreed delivery. The
assumptions and risks are continually controlled and managed.
Input
Transition Plan
Output
Resolution and implementation of associated tasks.
Regular project reviews.
Adaptive/corrective actions.
Start up of escalation process if needed

9.7.5

Implement Integration Plan

Definition
Set up the processes and tools to integrate/co-ordinate the delivery of all major components, to ensure the
Smooth delivery of all services e.g. Local/Central Help Desk, ERP, EDMS, Network, etc
Input
Solution design, technical plan,
Output
Documented tools and processes designed to assist with the transparent integration of all component
delivery hubs.

9.7.6

Escalation Management

Definition
This sub-process will come to play, if required, to escalate to Management (Customer and IT SERVICE
PROVIDER) any deviation from the initial Transition plan that would have a negative impact on the
agreed deliveries (Timing, Services, Costs, etc.)
Input
Contracts
Proposal
Project review minutes
Output
Escalation document including proposed actions and recommendation

9.7.7

Control Financials

Definition
The actual margin of the Project must be continually tracked again the planned margin to ensure timely
intervention when the financial aspects of the project go astray.
Input
Financial plans
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Output
Updated financial plans

9.7.8

Implement Management of Organisational Change Plan

Definition
If a Management of Organisational Change sub-project has been agreed upon, the balk of the
implementation will take place in this stage. This is a critical process!
Input
Management of Organisational Change Plan
Transition Plan
Transformation Plan
Proposal
Output
Smooth Transition

9.7.9

Transfer People

Definition
This sub-process transfers people from the customer's control to IT SERVICE PROVIDER's control, and
establishes them in their new employment, as well as managing all aspects of organisational change
associated with the outsourcing, including communication plans, individual guidance, employment
contracts, pension transfers, organised labour issues and legal obligations, career opportunities.
Input
The Contracts and their associated schedules as they relate to people, together with the detailed
transition plan.
Output
Completed transfer of people and successful organisational change, signed off by the customer as
fulfilling the people-related transition obligations defined in the contract to their satisfaction.

9.7.10 Transfer Assets

Definition
This sub-process transfers assets from the customer's control to IT SERVICE PROVIDER's control.
Asset transfer includes all issues relating to the ownership, licenses and maintenance of physical assets
such as hardware, environmental equipment and buildings
Input
The Contracts and their associated schedules as they relate to assets, together with the detailed
transition plan.
Output
Completed transfer of assets, signed off by the customer as fulfilling the asset-related transition
obligations defined in the contract to their satisfaction.

9.7.11 Transfer Contracts

Definition
This sub-process transfers contracts from the customer's control to IT SERVICE PROVIDER's control.
Contract transfer includes all asset issues including obligation transfer, re-licence and purchase of
software and third party services such as maintenance.
Input
The Contracts and their associated schedules as they relate to contracts, together with the detailed
transition plan.
Output
Completed transfer of contracts, signed off by the customer as fulfilling the contracts-related
transition obligations defined in the contract to their satisfaction.
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9.7.12 Transfer Services

Definition
This sub-process transfers services from the customer's control to IT SERVICE PROVIDER's control.
Contract transfer includes confirming the technical solution and creating appropriate processes and
procedures, agreeing the baseline and confirming service standards, service level agreements and
performance metrics. Data transfer and data rights and control.
Input
The Contracts and their associated schedules as they relate to services, together with the detailed
transition plan.
Output
Completed transfer of services, signed off by the customer as fulfilling the services-related transition
obligations defined in the contract to their satisfaction.

9.7.13 Transfer Projects

Definition
This sub-process transfers projects from the customer's control to IT SERVICE PROVIDER's control.
Project transfer includes the transfer of any ongoing projects with agreed project plans.
Input
The Contracts and their associated schedules as they relate to projects, together with the detailed
transition plan.
Output
Completed transfer of projects, signed off by the customer as fulfilling the projects-related transition
obligations defined in the contract to their satisfaction.

9.7.14 Transfer Relationships

Definition
This sub-process transfers relationships from the customer's control to IT SERVICE PROVIDER's
control. Relationship transfer includes communications including corporate, group and one-to-one contact
between all impacted parties, and the hand-off of any informal but critical personality-based contacts
Input
The Contracts and their associated schedules as they relate to relationships, together with the detailed
transition plan.
Output
Completed transfer of relationships, signed off by the customer as fulfilling the relationships-related
transition obligations defined in the contract to their satisfaction.

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10 Transformation
At this Stage, IT SERVICE PROVIDER has secured customer acceptance that the transition process has
completed satisfactorily. IT SERVICE PROVIDER has adopted the usage of ITASM, the methodologies
defined here are some of major guidelines that drive are delivery model and hence underline many of our
tasks in this stage. In this stage the two basic objectives (improve services incrementally and add value
adding business services) are achieved with the use of the sub-processes listed below. All sub-processes
with the exception of the Uncover Need and Initiate Customer Interest in Value-Add Services process
address the incremental improvement objective.

10.1 Objectives
To delivery to required service levels (steady state) and to reconfigure our processes and/or hardware so
that we can deliver to or exceed IT SERVICE PROVIDER's economic targets and to continually augment
our initial contract with further value adding services.

10.2 Dependencies
Completion of the Due Diligence Stage and at least commencement of the Transition Stage

10.3 Key Performance Indicators

Retention rate
Volume of new orders being generated with the customer (i.e. the generation of new business)

10.4 Key roles

10.4.1 Stage Owner
ASM (ASM installed)

10.4.2 Contributors
Sales Executive, Technical Consultant architects, Technical Consultant developer, IT SERVICE
PROVIDER Executive, Delivery Manager

10.5 Input

Customer sign-off that Transition has completed satisfactorily

10.6 Output (qualified and measurable)

Services meeting customer and IT SERVICE PROVIDER targets

10.7 Sub-Processes
The sub-processes in this Stage are:
Uncover Need And Initiate Customer Interest In Value-Add Services
Drive for Standards
Drive for Quality
Drive for Performance
Drive for Economics
Change Management
Each of these sub-processes is outlined in the following paragraphs.

10.7.1 Uncover Need and Initiate Customer Interest in Value-Add Services

Definition
It is one of the uppermost goals of TOTAL OUTSOURCING DIVISION to increase our services
delivered to our customers and therefore the revenue. This sub-process is the one which will assist
(primarily our ASMs but) all customer facing employees with the discovery of business opportunities and
the positioning of those opportunities with our customer.
Input
Customer interviews
Internal knowledge of burning bridges, etc...
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Output
The customer confirmed by the Transition team as having an interest in outsourcing in a new area and
having an interest in starting a process that may lead to the award of one or more outsourcing
contracts. I.e.A Qualified Target.

10.7.2 Drive for Standards

Definition
This sub-process pursues the implementation of best-practice oriented standards across all aspects of
technology and service.
Input
Services transitioned on an as-is basis.
Output
Services conforming to relevant best-practice oriented standards.

10.7.3 Drive for Quality

Definition
This sub-process pursues the attainment of both process and output quality using recognised quality
management tools and techniques
Input
Services transitioned on an as-is basis.
Output
Services using processes that meet agreed levels of quality and delivering outputs that meet agreed
levels of quality.

10.7.4 Drive for Performance

Definition
This sub-process pursues agreed performance targets using all appropriate performance management
tools and techniques.
Input
Services transitioned on an as-is basis.
Output
Services meeting agreed performance targets.

10.7.5 Drive for Economics

Definition
This sub-process pursues price targets agreed with the customer and cost targets agreed with IT
SERVICE PROVIDER executives in the business case.
Input
Services transitioned on an as-is basis.
Output
Services meeting or exceeding customer expectations of price while meeting or exceeding IT
SERVICE PROVIDER expectations of profit.

10.7.6 Change Management

Definition
The change Management process is one which ensures that all of the changes that the customer requests
which are over and above the services defined in the proposal and resulting contracts result in additional
revenue for IT SERVICE PROVIDER (as well as the increased services). These changes could and

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should be sometimes initiated by IT SERVICE PROVIDER employees (primarily the Account Service
Manager) For Example the up grading of OS, or end-user software.
Input
Contracts
Proposal
Output
Paid Work packages

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