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Outsourcing - Part 6

Outsourcing - Part 6

Dos and don'ts from the CIO Executive Council

Defining relationships

  • Treat outsourcing vendor contractors as you would your own employees in terms of respect and mistake management
  • Develop local leaders who understand the corporate culture
  • Obtain approval rights for vendor leadership personnel
  • Locate contractors at your captive overseas locations
  • Establish dedicated relationship managers on your team

Negotiating new terms

  • Clearly define service expectations
  • Expect contracts to need adjustment over time
  • Keep it simple; avoid complex formulae for severity levels and escalation rules
  • Frame renegotiation in terms that emphasise the benefit to the vendor

Key performance indicators

  • Explain to business leaders that outsourcing requires more management oversight and planning than in-sourced service
  • Don’t set key performance indicators (KPIs) for performance that can’t be measured
  • Establish KPIs before creating service level agreements
  • Include regional managers as early as possible in establishing performance requirements
  • Develop a performance measurement process that does not force users to distinguish between outsourced and internally-provided service

Service level agreements

  • Keep service level agreements (SLAs) to a minimum — if you didn’t track it before, you may not need to track it now
  • Don’t create SLAs for every little thing Establish SLAs as a minimum expectation, not the optimal goal
  • Don’t make SLAs technical and disconnected from the end result
  • Expect to adjust SLAs as contracts change
  • Try adjusting SLAs rather than renegotiating whole contracts

Source: CIO Executive Council

Read more in the CIO Australia outsourcing series

Part 1 - Top outsourcing countries and trends

Part 2 - Clients and incumbent vendors are renegotiating outsourcing deals before they expire

Part 3 - Global versus local

Part 4 - Negotiating contracts and maintaining relationships

Part 5 - Notes from the trenches


Nine ways to find hidden savings in your outsourcing invoice

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Tags outsourcingKPIsSLAoffshoringnegotiatingservice level agreementsIT outsourcing

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