The sourcing strategy has to be in line with the long term business plan, the role of IT within the company, the geographic ambitions, the IT strategy, the architectural ambitions, the contractual situation, risk, opportunities and threats, etc. On top of that it’s important to assess the interaction, intertwining and complexity of the IT solutions from the business processes point of view. After this assessment, the different IT-domains can be described and agreed upon.The sourcing strategy also describes the maturity of the IT organization and the skills and experience regarding outsourcing IT activities and the contract management processes
In this phase the strategy is transformed into a crystal clear definition how the sourcing will be put in place. Not only will be defined exactly what will be outsourced, but also how the expected results will be realized making use of one or more external suppliers. It’s important to define a precise and accurate set of requirements the outsourcing relationship has to comply with, to assure a maximum fit with the business requirements. Additionally the outsourcing process is defined in terms of governance, milestones, process steps, approach, etc….
Contracts are necessary to define and agree on topics like scope, size, services and conditions of the cooperation. Partnerships have a long term focus. Contracts are key in the governance, both in normal as in difficult situations.The world is a continuous flux of change, companies also. This implies that contract should not be rigid, but a contractual framework which offers flexibility in the cooperation described in contents and juridical terms.In the negotiating and contracting process a clear separation has to be established between the content en juridical terms and the contract ownership and mandate.
In this phase it’s all about migrating the “current mode of operation” (CMO) into a new and contractual agreed “future mode of operation” (FMO). This transition is not only about information systems, infrastructure, service agreements, the retained organization, but also about roles and responsibilities. In parallel the customer’s organization has to sort out the required level of expertise necessary to manage the IT demand processes. The Demand-Supply processes have to be defined and put into place. And last but not least, it has to be clarified what will be done by the customer’s and supplier’s organization.
During the execution phase the customer’s organization needs to keep an eye on the delivered performance of the contracted services .On top of that it’s necessary to manage the change process in order to keep up with the ever changing market situation and conditions.During the performance measurement it’s not only about matching the agreed service levels but also to measure the satisfaction of the end-users and business management about the services. Many times, suppliers promise an increased level of innovation next to high cost . During the start of the partnership life is a bed of roses, but in time the level of flexibility and innovation erodes…..
All co-operations are finite. Contracts have a currency, but changing business environments, poor performances of the supplier(s), changes in rules and laws, new sourcing strategies can lead to the termination of co-operations/partnerships.
After termination there is always a transition. A transition to the customer’s organization or to one or other (new) suppliers. After the termination it’s necessary to carry out an evaluation session to share the points of improvement. This will help the customer’s organization to shape better partnerships/co-operations in the (near) future.