Alsbridge, Inc. Reveals Seven Steps for Service Management in Outsourcing Negotiations

Leading global sourcing advisory and benchmarking firm, Alsbridge, Inc., today announced a new report which identifies seven steps for service management in outsourcing negotiations.

Whether negotiating a new outsourcing agreement individually or with the help of an outside consulting firm, it is easy to overlook the importance of treating the outsourcing negotiation as a project and ensuring solid project service management disciplines are incorporated into all activities. Once the outsourcing contract negotiation process begins, the back-and-forth discussions and “issue of the day” mentality can quickly derail the best of intentions.

How can an organization make sure it is conducting service management in an outsourcing deal correctly? Alsbridge, Inc. identified seven steps to follow to ensure a successful outsourcing negotiation:

1) Scope Management - As with any project service management endeavor, it is important to begin with the end in mind. It is essential to take the time at the beginning of the process to ensure a common understanding of all services that are in scope for outsourcing.

2) Requirements Definition - What are your requirements for an outsourcing deal? No doubt they will mature and change over time, but as with scope, it is important to document your up-front expectations regarding cost, term, timeframe, transition/transformation, Service Level Agreements (SLAs), resource units, processes and tools, organizational structure, etc. and then manage modifications to them as you go.

3) Resource Planning - When initially considering an outsourcing contract negotiation, it is easy to under-estimate the resources from your organization who will be required to fully develop detailed scopes of service, service levels, and terms and conditions that achieve your objectives.

4) Scheduling - There are a lot of moving parts with project service management in an outsourcing negotiation. The primary areas of focus are naturally on the “big four” consisting of the Master Services Agreement (MSA), pricing, scope of services and SLAs.

5) Tracking/Reporting - A project manager can track actual progress against the schedule, the scope, and the requirements and raise issues if it looks like anything is getting off track.

6) Issue Tracking and Resolution - Throughout the outsourcing contract negotiation process there will be issues raised that need owners assigned to manage. Each issue will need to be tracked to resolution and communicated out to the overall team.

7) Governance - Because of the complexities involved, it is necessary to schedule frequent (weekly) governance meetings to meet and allow the client’s and the provider’s executive staff to discuss all activities to ensure adequate progress is being made and that roadblocks are being eliminated.

“With a little planning up-front, and some continued focus through the process, you can ensure a better outcome and eliminate much of the last-minute heroics that often come into play in project service management,” said Ben Trowbridge, CEO, Alsbridge, Inc.

Read full report from Alsbridge, Inc.

About Alsbridge Inc.

Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO.  We’ve helped hundreds of companies reduce costs and get more value from their vendors.  Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors.  Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients.  This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.