• Define expectations. It is not enough to say you “want innovation or speed to market”. The definition of critical terms should be articulated with a high degree of specificity, or expectations are typically not met. Often, the organizations have different priorities. If you have realistic expectations, the transition path is typically more realistic.
• Define roles and responsibilities. In a multi-vendor environment, who is responsible for integration between these environments? Too often, businesses will assume it is the infrastructure provider without negotiation or discussion.
• Build a robust ‘Stay Back’ team. Most organizations have highly competent staff that understands the organization’s strategy and business drivers; however, many do not have staff that has ever managed a complex third party vendor contract.
Consequently, organizations going through IT outsourcing for the first time often have limited competent resources to pair against the outsourcer’s team. As a result, Stay Back team members typically become overwhelmed with vendor management, dealing with organizational changes, and realizing that the old resources they would often call upon to deal with issues are no longer available in the same capacity. A successful transition to IT outsourcing is dependent on the amount of training organizations provide their Stay Back team on vendor management, contract compliance and metrics or by augmenting their team with professionals with experience in vendor management to achieve the same results.
Therefore, it is important to practice the following: • Expect and contract good deal governance. Not all outsourcing deals will be a success from day one; in fact, most are not. A well defined governance framework should be an integral part of the contract and is fully integrated into the service catalogue which outlines the roles and responsibilities of the outsourcer and the Stay Back team.
• Manage outcomes and not the process. Establish key metrics and manage the outsourcer's ability to deliver to achieve different results. This often requires that organizations let the outsourcer make operational decisions to meet strategic requirements.
• Make them earn your reference. All outsourcers strive to use you as a reference to others in your industry to further build out their outsourcing footprint. Make sure your needs are met; If there are issues, elevate them within the outsourcer to a level that is concerned with using your organization as a reference.
• Take your time. Your outsourcing partner needs to have the right capabilities, industry credentials and a complementary corporate culture to help change your business.
Written by Louie Velocci (CA-CISA, CISSP, CAA, GCFA, CGEIT), a Partner with KPMG’s IT Advisory Practice in Atlantic Canada. For more information regarding offerings and specific considerations around IT outsourcing, contact Louie Velocci at (902) 492-6012 or email@example.com.