As companies seek to focus on their core businesses and reduce costs they look to best-in-class firms to support and manage Outsourcing initiatives. Selecting the right Provider will minimize disruption, reduce risk, and lower costs. Most importantly, it will allow the company to focus on its core business, speed products or services to market, and increase shareholder value.
Conversely, selecting the wrong Provider may result in a failure in core business processes, Customer dissatisfaction, and reduced earnings. It can put the very viability of the business at risk.
Key aspects to a successful outsourcing initiatives include:
- Identifying the right-fit firms who should bid on Outsourcing
- Developing a focused but detailed Request for Proposal (RFP) document
- Outlining a transparent RFP process and schedule; sharing with RFP recipients
- Keeping the RFP recipients engaged throughout the process
- Developing and executing a methodology to assess and score the RFP bidders
- Reaching out to references and other third parties to perform a 360 assessment of the bidders
Once the right-fit Provider is selected for “due diligence,” the negotiation and contracting phase begins. A thorough, detailed contract will drive the right behavior and set expectations throughout the contract duration. Core to the contract is a section on Service Level Agreements (SLAs) that will likely involve penalties or credits in the event that services are not delivered as specified. A comprehensive contract drives the correct behaviors for the duration of the relationship.
TechPar has supported midsize and large clients throughout the RFP and contract lifecycle:
- Advising on which Providers are a best-fit to receive a RFP for said services.
- Developing an extensive RFP documentation package.
- Leading/ managing the RFP process.
- Developing scorecards and assessment methodologies.
- Supporting the due diligence phase.
- Supporting the contracting phase, working alongside procurement and legal.
- Developing appropriate SLAs and other penalties within the contract to hold the Provider accountable.
- Advising on key language within the contract based on best practices and experience.
A Service Management Office (SMO) in companies can take many forms. For example, TechPar has significant experience supporting companies seeking to administer an Outsourcing/ Managed Services arrangement. A key role of the SMO is to ensure that company and Vendor abide by the terms of the contract and follow standardized processes and procedures.
Key SMO functions include:
- Governance: Processes that monitors and ensures SLA measuring & reporting, contract changes, audit support, and quality.
- Service Management: Processes that monitors and ensures demand management, vendor service review (e.g., scorecards and surveys), and IT services functional alignment.
- Financial Management: Processes that monitors, maintains, administers budgets, forecasts, and billing.
Contact Mark Huppert to discuss how we can assist you regarding Outsourcing Services.