SSO Pro Spotlight: How to Improve Service Contracts & Renewals Negotiations

Edwin Zambrano recently completed the SSO Pro online learning course that covers the skills requirements for today's Shared Services practitioners. He tells us why the "governance" module was so important in helping him to manage current outsourcing relationships, and what he learned about benchmarking. SSON: Edwin, what are your responsibilities as Head of IT Service Management? My role revolves around the implementation and management of end-to-end delivery of IT services to the Goodman business. This includes IT services that are globally outsourced (Service Desk, Field Operations, Database, Remote Infrastructure Management – Server, Storage, Network and Security). Service delivery encompasses (1) contractual services, which include RFP processes, contract negotiation and contract variation; (2) financial services, which include IT budgeting and spend management; and (3) operations, which include measuring and actioning customer experience, SLA performance management, vendor management, and governance. SSON: How long have you been in your current position? More than 5 years to date. SSON: What are your three main challenges in the year ahead? 1. Ongoing contract management and overseeing outsourcing contract renewal or RFP. 2. Exploiting emerging service delivery models. 3. Discovering an inexpensive approach to benchmarking. SSON: How has the SSO Pro course helped develop solutions to some of these challenges? On Benchmarking– Key Learnings: 1. Knowing what "benchmarking" really means: a. It is not a comparison or competitive analysis (it is not about copying others). b. It is about drawing lessons from one organization and translating them into your unique culture and mission orientation, for example: i. why are there differences in performance? ii. how can you achieve higher performance? 2. Knowing its key characteristics: a. It is a continuous process b. There is no single best practice benchmarking 3. Knowing the three categories of benchmarking Gaps: 1. Limitations in past research and in industry-level understanding of benchmarking: a. Growing body of research assuming that benchmarking is solely a comparison activity. (What can be done to mitigate this?) b. More focus on using empirical assessments of customer satisfaction as a performance assessment tool. c. More materials needed on methodologies for internal benchmarking 2. Add materials pertaining to IT service integration roles and key success criteria in a multi-sourced environment. On Contract Management– Key Learnings: 1. The Basics: - Contract Management is my one of my weak points. a. It is not all about legal. b. Key elements of a good contract include: i. Defining the transaction, deal and relationship ii. Making functions clear iii. Commercial goals iv. Risks: 2. Identifying risks 3. Contracting risk mitigation 4. Contracting of risk sharing Gaps: 1. Contracting the service integration role. 2. Detailed guidelines in developing service schedules. 3. Gain-sharing approaches (innovation). On Finance: Key Learnings: 1. Basic points covered. 2. Confirmed what I already knew. Gaps: 1. IT budgeting in the light of an outsourced IT environment 2. Foreign exchange hedging 3. Cost transparency and recharging models On Governance: Key Learnings: 1. Two distinct stages: answerability and enforcement 2. Steps taken to create and maintain a common culture to help teams and individuals work most effectively with each other. 3. Governance framework in an outsourced environment, including documentation of roles and responsibilities, information to exchange, handover points, policies and multi-vendor matters. Gaps: 1. Multi-tier governance and how it relates to another. 2. Prevalent Governance models SSON: How are you implementing some of the learnings from the course internally? I use my key learnings in dealing with my day-to-day challenges. It helps me build and implement effective frameworks in partnership with our outsourcer. SSON: Have you been able to share some of the tools and templates with your team and/or stakeholders (customers/suppliers) to improve your processes? Yes, but it’s also important not to be overly prescriptive. I always say, "Can you consider this idea…?" SSON: What was your favourite module? How has it impacted your day-to-day output/work? Governance – in particular the areas pertaining to running governance in an outsourced environment. It has helped me a lot in developing effective operational frameworks. SSON: Can you share a specific example of a concept, tool or skill learned in SSO Pro you’ve directly applied in your organization? Again, in governance, I have applied what I learned to structuring the agenda to ensure the process addresses issues and produces results. In particular, I have watched that the client-outsourcer governance structures mirror each other, in particular in documenting governance roles and responsibilities, information to exchange, handover points, policies and multi-vendor matters. SSON: Are there any topics that you would like us to include in the course going forward? 1. Cost transparency and recharging of services – types, allocation approaches, etc. 2. Multi-vendor outsourcing management and service integration 3. Application lifecycle management – from the perspective of service management SSON: What are the main trends or innovations that are affecting your services delivery, and that you would like to know more about? 1. Multi-sourcing governance. 2. The service integration role. 3. Service management of cloud-based solutions from difference vendors. [inlinead]

SSO Pro Spotlight: How to Improve Service Contracts & Renewals Negotiations

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