Whether you are an executive of a global enterprise or a business owner with a small IT team of at least 2 people, the pressure is on. Your organization needs to cut costs and boost service levels. You want to be a champion for your team -- to be a leader in maximizing rewards and minimizing risks.
To do so, you must be thoughtful about focusing your internal resources on core competencies - the key drivers that most greatly differentiate your organization from others in your industry. And, you must be honest about when and where it makes sense to apply leverage using outside resources and/or new technologies or processes to give your organization the greatest advantages - the best foundation for supporting your core competencies.
Once you accept this mission, how do you execute it successfully?
The following brief presumes you have already identified suspect activities that merit further scrutiny regarding considering internal and/or external service providers. After this shortlist is identified, it is time to consider alternatives for the scope of services that you may want from service providers.
Preparing services scope alternatives
The extent of services and their comprising activities that are to be included in providers' proposals are called the scope of work, or scope. Consider that there are many alternatives, ranging from all-encompassing holistic scope down to scope which is highly sub-divided into key activities and/or augmentations. Key variables to consider are:
o Who is Responsible? Which provider has primary, secondary and/or tertiary responsibilities for each activity, depending on the degree of contribution and/or impact of their actions?
o Support Frequencies? How often will services be required? For example: One-time, Periodic (Weekly, Monthly, Quarterly, Annually), and/or Stream (on-going)
o Where Operated? At which site(s) will services be provided? Internal Site(s); Vendor Site(s); 3rd party Site(s)
o Key Service Levels? What are the key performance and/or timeliness metrics that will govern the services? Are remedies (including penalties) expected if actual results fall below agreed levels? Are incentives available for over-achieving targets? Remember to keep a good balance -- as few and as simple metrics as possible to allow assuring performance and enabling flexibility.
o Burdened adders? External service providers must effectively include costs in their proposals that may have been missed by internal service providers in their proposals. Due to such oversights, significant benefits have been lost in leveraging external resources. For successful comparisons, you must look beyond only employee salaries.
Be complete in considering all burdened cost adders that will impact your organization, such as: overtime, benefits, management, training, support, facilities, furniture, computers, communications, administration, corporate allocations and other important operating and/or capital costs. Consider where to 'move' burdens when thinking about services scope alternatives, to place these to maximize your organization's advantages.
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