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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

Also:

Nine ways to find hidden savings in your outsourcing invoice

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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