IT and outsourcing continue to be problematic, not least because fundamental learning about this subject fails to be applied systematically, and because IT is inherently difficult to manage. The economics are not obvious and emerging technologies have to be addressed, therefore IT goes to the heart of many enterprises and interfaces with multiple business units and processes, and there are continuous skills shortages.
Unfortunately complexities are not removed in outsourced situations where additional problems come into play, for example the supplier's capabilities, whether the IT is right for an outsourcing solution, and whether the contract is robust but flexible enough to allow for outsourcing to take place. Objectives need to be realistic, and factors such as whether the internal management is mature and capable enough in this field, and the impact of prohibitive switching costs on behaviour once an outsourcing deal has been signed all have to be taken into account.
The authors have built up over two decades of research, advisory and practitioner experience that enables them to distil the fundamental challenges in IT and outsourcing and demonstrate how these can be addressed.
About the Author
Sara Cullen, Managing Director of Sara Cullen and Associates, is one of Australia's most experienced outsourcing practitioners and thought leaders. She has consulted to over 70 clients in 90 projects with contract values up to $1 billion per annum covering 45 business functions. She has designed innovative partnering arrangements including franchise-type agreements, shared risk/reward structures and incentive programs in addition to more traditional arrangements. Her clients are in the communications, defence, finance, manufacturing, transport and utility industries as well as local, state and federal governments.
Andersen Professor of Information Management and E-Business at Warwick University Business School, UK. Associate Fellow at Templeton College, Oxford and holds visiting chairs at Erasmus and Melbourne Universities.
Read an Excerpt
Provides a comprehensive framework for successful outsourcing
Table of ContentsIntroduction; About this Book; Why the Need for a Building Block Approach?;The Outsourcing Lifecycle - Eight Building Blocks for Success; Architect Phase: The First Building Block - Discard the Myths: Gather Acumen; Discard The Myths...; Determine Benefits Expectations; Collect Market Intelligence; Conduct the Comparative Assessment; The Second Building Block - Get Equipped: Prepare The Strategies; High Level Sourcing Decision Models; Determine The Organization's Strategic Preferences; Decide the Outsourcing Approach; Identify the Outsourcing Lifecycle Competencies Required; Prepare the Communications Strategy; The Third Building Block - Identify the Right Activities: Target the Services; Select the Suitable Services; Profile the Target Services; Prepare the Base Case; Conduct the Feasibility and Impact Study; The Fourth Building Block - Ensure the Results: Design the Future; Vision the Attributes of the Future Arrangement; Develop the Service Level Agreement and Key Performance Indicators; Formulate the Pricing Model; Draft the Contract; Model the Relationship Behaviour; Plan the Future Management;
Engage Phase: The Fifth Building Block - Commercial Mating: Select the Supplier(s); Selection is NOT the First Block - Ensure the ITO Foundation has been Laid; Gating and Refining via Staged Competitive Tendering; Getting the Right Perspectives - the Evaluation Team; Determining the Decisive Factors - the Criteria; Exhibiting Fairness - Probity; Preparing the Market Package; Successful Selection - ITO is not an Auction; Due Diligence Investigations; Negotiation; Finalising the Contract; The Sixth Building Block - The Starting Gate: Make The Transition; Key Transition Activities; Staff Transitions; Managing the Transition Project; Govern Phase: The Seventh Building Block - Get the Results: Manage The ITO; ITO Critical Success (and Failure) Factors; Key ITO Management Activities; Relationship Management; The Eighth Building Block - Do it Again: Reconsider the Options; Termination Triggers; Options; Assessments; Preparing for a Handover from an Incumbent Supplier;
Conclusion; References And brief further reading.