seat58F
outsourcing relationships: international, inter-economic, interpersonal
September 4, 2010 ~ 09:46:59 AM * -07:00ST
performance bonus to IT alignment
Post # 520 by
admin on January 24th, 2009 ~ 08:49:33 AM
Posted as business outcome |
No Comments »
the metric “cash flow from operations as a percentage of revenue” continues to be a key indicator of financial performance of the company. since the payout under the plan is based on a 3 year rolling average, executives are dissuaded from taking excessive risk in any given year….
this strategy, initiated by the Compensation Committee supported by a compensation consultant and separate counsel, ultimately suppresses internal R&D and accelerates acquisition and outsourcing. its fuel for a curious engine that absorbs product innovation and expels functions that have been replicated as generics by the industry. a few things that the company must do well:
- acquire high margin deals and product lines
- manage internal overhead aggressively
- identify generic functions for decoupling and distribution to external providers
promoting Problem Mgmt
Post # 509 by
admin on January 20th, 2009 ~ 09:59:25 AM
Posted as metrics, problem |
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a dashboard for Problem Mgmt is a slam dunk. PM is all about prevention of incidents and alerts, that should easily decode to cost savings.
problem managers are also closely associated with maintenance of the knowledge database and a good KDB offers troubleshooting expertise to people on the front line, either on the helpdesk or in the field. PM investments should always show mean-time-to-repair dropping. If its not the case, then something strange is going on, like the introduction of new services that are not immediately benefiting from PM.
PM should also reduce the number of incidents (productivity increase to both parties) and increased availability (productivity for the outsourcer, reduced escalation cost and increase service improvement bandwidth for the service provider).
every process needs a promoter
Post # 507 by
admin on January 17th, 2009 ~ 09:36:12 AM
Posted as Uncategorized, metrics |
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its great if there is natural organizational support for a specific process, but there’s always pressure to streamline and simplify. the process owners need to be able to advertise and promote the inherent value contributed by their process, and the best way to do this is with KPIs that are consistently in the face of the sponsors.
Build and distribute an internal dashboard that emphasizes business value in at least two of the following areas: cost (look how much money we saved), revenue (we made these deals happen), and compliance (we’re keeping the client’s service managers off your back).
The one to de-emphasize? yes! end-user satisfaction. first, beyond meeting the minimum performance requirements, its impossible to get an accurate read month to month. there’s no way to correlate service delivery effort to changes in csat because its depends on attitude of the end-user. most importantly, the service manager does not care about the end-user experience. its all about meeting service levels and cost targets.
service level additions
Post # 505 by
admin on January 15th, 2009 ~ 07:19:33 AM
Posted as metrics |
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outsourcers tend to micro-manage the portfolio of service levels and KPIs mostly because they can. with little consideration to the real contribution of these metrics, they relish adding a layer of bureaucratic spaghetti to further impede progress.
Steps to add new Service Levels:
a.1) outsourcer to provide requirements to the service provider. SP recoils and provides feedback concerning industry best practices. outsourcer ignores the feedback.
a.2) outsourcer defines the business value of the new metrics. (just kidding!)
b) based on some ultimate agreement, new service level and/or KP targets are computed per the guidelines defined in Clause () below. The required data and the source of data is identified.
b.2) SP defines the cost of managing the data. (just kidding!)
c) the data repository is agreed along with a method for maintaining the validity of the data. (this means a new Excel workbook in some document repository.)
d) if the new reports do not meet the need of the outsourcer, the outsourcer re-starts the process.
e) if the new reports do meet the need of the outsourcer, the outsourcer re-starts the process anyway.
Finally, to test your understanding, true or false? : “the object of Service Level reporting is to evaluate the effectiveness of the service provider in delivering services to the outsourcer.”
SIP status reporting
Post # 497 by
admin on January 13th, 2009 ~ 04:42:24 PM
Posted as escalation, metrics |
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- root cause
- mitigation efforts
- gaps (what still needs to be done)
- timeline (when will we be green)
- what we need from the outsourcer to get there
the service improvement plan gambit
Post # 494 by
admin on January 12th, 2009 ~ 04:01:15 PM
Posted as contracts, metrics |
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given a difficult service level metric, the provider ultimately ends up proposing a service improvement plan to prevent or minimize service level misses. if the SIP has to be approved by the outsourcer, this is generally a BAD THING as it means that the outsourcer has the responsibility to run chunks of the infrastructure itself either internally or via another service provider. the outsoucer is in the position to control that quality and effectiveness of the fix, the provider is at the mercy of the outsourcer to agree that further investments are necessary.
relevant service levels should be turned off after the SIP has been approved. they should remain off during the implementation and testing of the SIP.
flogging to continue until further notice…
Post # 490 by
admin on January 11th, 2009 ~ 03:45:06 PM
Posted as escalation, metrics |
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some outsourcers make the service providers suffer for missed service levels. humiliation is considered a prerequisite for extracting penalties or for crediting the penalty bank that providers work tirelessly to debit. is there any data that shows that unreasonably harassing the service provider makes any sense in the long term?
after a failure to meet service level targets, the outsourcer wants to know:
- is the service provider executive sufficiently contrite? (if he continually blows this test, the contract is at risk)
- what was the root cause of the failure?
- which organization was responsible? regarding point number 1, the prime vendor’s executive better look contrite even if another supplier (even remotely within the exec’s span of control) is at fault.
- a plan for corrective action.
availability design criteria - mission critical
Post # 487 by
admin on January 10th, 2009 ~ 02:44:04 PM
Posted as availability |
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- approved hardware and software components
- no single point of failure: all hardware components are redundant
- all components are actively monitored 24×7
- “do not touch” production windows defined
- all components have spares on-site
- guaranteed 30 minute response time for hardware engineers
- fail-over rehearsals conducted every quarter
- service re-build rehearsals conducted every quarter
