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Planning and Managing IT Infrastructure
Notes It also will enable the firm to hold its outsourcing provider accountable for implementing
corrective action as needed. In a typical contract, if the service provider’s performance and costs
don’t meet the SLA standards, financial penalties can be assessed and the contract can even be
terminated.
How frequently measures are taken and how quickly changes are implemented depends on the
importance of the business process in meeting true business goals. In 2003, Procter & Gamble
signed four major outsourcing contracts, each with a different provider: a $3 billion, 10-year
deal with Hewlett-Packard to take over much of the firm’s IT services; a 5-year deal with Jones
Lang LaSalle for facilities management; a 5-year deal with Sykes Enterprises to outsource customer
care, Customer Relationship Management (CRM) applications, and global fulfilment services;
and a $400 million, 10-year deal with IBM for human resource services. An organisation of 100
people was formed to focus solely on managing all outsourcing relationships and to avoid
losing control of service levels or the scope of the outsourced project. The employees were
trained by experts from P&G’s Purchasing Department in the best practices for dealing with
suppliers. The group includes experts in disciplines from IT to CRM and facilities management.
The P&G team uses software to track hundreds of service levels and enter data into a performance
scorecard to see how well each vendor is performing. Each member of the team is assigned to
“work on just one of the outsourcing contracts, but they interact and keep tabs on how their
colleagues manage the other vendors.”
Did u know? The ongoing tracking and measurement of important metrics enables the
organisation to use the data as feedback, so that each step in the outsourcing process can be
improved based on the result of the project.
Self Assessment
Fill in the blanks:
12. ........................................ is based on analysing the work to be done, it’s associated current
processes, and level of effectiveness and resources required.
13. Smart sourcing requires an organisation to work in a true ........................................ with the
outsourcing provider.
14. A key component of governance is to implement ongoing monitoring and analysis of
outsourced ........................................ processes using an appropriate set of metrics.
15. A key to effective ........................................ is choosing the right measures to evaluate the
performance of the process.
Case Study The Sun Microsystems
ervice/maintenance contract sales are highly profitable for many high-tech businesses.
In order to reap the financial rewards however, a company must have in place a
Sfocused channel strategy for implementing and managing maintenance contract
sales. It is well documented that an expertly run contract sales program can net a corporation
millions in incremental revenue. Without such a program much of that income is lost.
Contd...
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