The document discusses outsourcing governance. It begins with an overview of governance trends related to functions, benefits, and vendor management. It then discusses how to get stakeholders engaged and where the value add of governance lies. The document provides examples of governance processes and a case study of how governance was implemented for a telemarketing outsourcing project. The case study describes the process used, from issuing a request for proposal to site visits and oral presentations with finalist vendors.

1. Copyright © 2007 IAOP. All Rights Reserved.Copyright © 2007 IAOP. All Rights Reserved.www.outsourcingprofessional.org
An Executive Perspective
Current Challenges and Approaches to
Outsourcing Governance
Joann Martin, COP, PMP, Director
Strategic Alliances PBI
IAOP Summit 2007

2. Copyright © 2007 IAOP. All Rights Reserved.
• Governance
• Trends
 Functions
 Benefits
 Vendor Management
• How to get stakeholders to engaged
• Where is/What is the Value Add
• How the Process Evolves
 A Case Study in Governance in Action
Discussion Topics

3. Copyright © 2007 IAOP. All Rights Reserved.
Governance Example Charter
• Create /Execute/Adjust “Enterprise” Outsourcing Strategy
• Advise / Coordinate/Leverage Cross-Functional Outsourcing
• Advise / Approve Vendor Strategy/Execution/Consolidation
• Advise / Approve Outsourcing Business Structures/CIP’s
• Publish Consolidated Outsourcing Plans / Benefits/Internal Trends
• Create / Enforce Outsourcing Standards / Policies /
Processes/Internal SLA’s/Inter-Company Exchanges
• Monitor Business Factors
• Outreach to New Areas for Outsourcing Opportunities
• Monitor Industry Trends

4. Copyright © 2007 IAOP. All Rights Reserved.
Governance Effectiveness
• Links to corporate and key objectives
• Recognizes leadership has limited bandwidth
• Learns from good corporate and financial governance
• Design governance at both enterprise and LOB levels
• Good governance can simultaneously empower and ensure
compliance to enterprise vision

5. Copyright © 2007 IAOP. All Rights Reserved.
Acquisitions
Global
Counterparts
Lines of
Business
Centralized
Functions
Organization
Structure
Governance Trends: Functions

6. Copyright © 2007 IAOP. All Rights Reserved.
Outsourcing
Maturity
Benefit
Early Benefit
Cost Savings
Stabilization
Productivity Gains
Risk Management
Strategic
Capability Expansion
Customer Management
Governance Trends: Benefits

7. Copyright © 2007 IAOP. All Rights Reserved.
Staff
Augmentation
Strategic
Short Term
Long Term
Global
Insource/Outsource
Offshore
Global
Governance Trends: Vendor Management

8. Copyright © 2007 IAOP. All Rights Reserved.
Partner
Stakeholders
Process
Implementation
Stakeholders
Executive
Stakeholders
Growth
Global
Trends
KPI
SLAs
Governance Stakeholder Involvement
- Early
- Business Priorities
- Success Factors
- Future
- Business Priorities
- Partner Priorities
- Success Factors
- Future
- Implementation Factors
- Escalation & Change
Management
-Communication

9. Copyright © 2007 IAOP. All Rights Reserved.
Governance Stakeholder Involvement
Critical to Success:
MEASURE IT!
Strategic Alliance/Indirect Procurements - Stakeholder Project Survey
Introduction: As part of our continuous improvement effort to provide ever increasing service to Company,
Strategic Alliances & Indirect Procurement would appreciate your comments. We are committed to administering
this survey following significant projects to provide information on what can and should be doing better. The
feedback received from you will allow for the identification of strengths and areas for improvement that are
important to our customers.
Your input and comments are appreciated and critical to our success. Please take a few minutes to complete the
survey below and return it to x.y@c.com. Thank you for your assistance.
Please enter the following information:
Your Name:
Project Number:
Your Line of Business or Function:
Who was your contact in Strategic Alliance for this
project:
Is this your first time working with Strategic
Alliance/Indirect Procurement? If not how many
projects have you had them engaged?
Please answer the following questions:
(Circle One)
Strategic Alliance/Indirect Staff Not Satisfied Satisfied Highly Satisfied
 Knowledge of Product/Service Not Satisfied Satisfied Highly Satisfied
 Accessibility
Not Satisfied Satisfied Highly Satisfied
 Development of effective strategic sourcing plan
Not Satisfied Satisfied Highly Satisfied
 Negotiations of business terms/price Not Satisfied Satisfied Highly Satisfied
 Client Focus Not Satisfied Satisfied Highly Satisfied
Sourcing Process Not Satisfied Satisfied Highly Satisfied
 Definition and Communication of sourcing Process Not Satisfied Satisfied Highly Satisfied
 Effectiveness of process Not Satisfied Satisfied Highly Satisfied
 Did the time it take to complete process meet the
expectation
Not Satisfied Satisfied Highly Satisfied
 Do you believe that Risk was managed through project
and process?
Not Satisfied Satisfied Highly Satisfied
Comments:
What could we improve to serve you and business
better? What was the most valuable part of the
process to you?
Thank You For Your Time and Comments.

10. Copyright © 2007 IAOP. All Rights Reserved.
Governance Value Add
Growth
& Risk
Cost Savings
Cost Avoidance
Long Term &
Expansion
Commitment
Global Trends
& Changes
Its Not about PROCESSING
Sustaining
View

11. Copyright © 2007 IAOP. All Rights Reserved.
– Transition - includes people and process
• SLAs
• Integration
• Knowledge Transfer
– Talent – availability and accessibility
• Inadequate staffing
– Quality – defects
• Subcontractors
• Technology change
– Pricing – indispensable vendor leverage
– Culture – value/risk
• Misinterpretations/misunderstandings
• Trustworthiness
• Team productivity/esteem
– Business Continuity – natural disasters
– Sovereign – legislative changes
• States compensating business to use US workers
• Government export and import regulations (information/data/privacy risk)
• Piracy
• IP
– Currency - fluctuations
A Risk is a potential event with negative consequences that has not happened yet.
Governance Risk Management

12. Copyright © 2007 IAOP. All Rights Reserved.
1. New Sourcing – Requirements to Contract Process
Ensure the acquisition of third party commodities and services satisfy all PBI
internal business and strategy requirements.
2. New Project w. Existing Supplier Process
To ensure the proper identification, capture and communication of all PBI
product, business, and strategy requirements to an existing supplier and
Ensure compliance with internal PBI business and financial controls.
3. Requisition to Pay Process
Ensure that payment is made to the supplier for services or product supplied.
4. Supplier Relationship Management Process
Ensure negotiated process efficiencies and business benefits are realized,
consistently and proactively managed w. supplier through the life of contract.
5. Outsourcing Steering Committee Governance Process
Provide a formal mechanism for the review, approval and knowledge sharing of
outsourcing activities and supplier performance across the enterprise.
6. Dispute & Escalation Process
Ensure formalized process for escalating and resolving disputes with suppliers.
7. Contract Management Process
Provide a framework to ensure contract compliance and benefits achievement.
Governance Processes
Contract Management Process (Post Deal – Life of Active Contract)
Outsourcing
Steering
Legal
Enterprise
Procurement
Function/PMOPartner
START
END
Document
Source: Enterprise Procurement, Strategic Alliances
DecisionActivity
Last Updated: 08 / 08 / 2005
Page 1 of 1
START
Highlight Request
Event to
Procurement &
Legal
Highlight Missed
SLA event to
Enterprise
Procurement
START
Scenario – Missed SLA,
Service Credit Event
Scenario – End of
Contract Life
Event
Highlight Request
Event thru PB
Procurement
START
Scenario – Early
Termination
Request Event
Scenario – Early Termination
Request Event
START
Highlight End of
Contract Event to
Function & Legal
(6 mo. Notice)
Convene PB
Internal
Stakeholders
Terminate
or Extend?
Start New
Sourcing Process
New
Sourcing
Process
Advise / Approve
Termination /
Extension
Decision
Re-
Negotiate?
Negotiate
Extension
Advise on
Termination Steps
Advise on
Extension /
Negotiation
Help Define
Negotiation
Issues
Negotiate
Extension
Advise / Approve
Termination /
Extension
Decision
Awareness of
Service Level
Credit
Cure?
Review Service
Credit per
Contract
Attempt Cure per
Contract
NO
YES
NO
YES
EXTEND
TERMINATE
Process
Ref
END
END
END
Notify Partner &
PB Enterprise
Procurement
Notify PB
Stakeholder of
Cure
Execute
Extension /
Update Contract
database
Coordinate
Termination Steps
Submit Invoice
with Service
Credit
Review Invoice to
Ensure Service
Credit
Disputes & Escalation Process
Outsourcing
Steering
Legal
Enterprise
Procurement
Function/PMOPartner
Source: Enterprise Procurement, Strategic Alliances
Last Updated: 08 / 08 / 2005
Page 1 of 1
Document START
END
Activity Decision
Process
Ref
Partner
START
Document
Dispute to EP
Partner or
Function?
Function
Provide Partner
Documented Miss
Scenario –
Partner Payment
Dispute
START
Scenario –
Function Quality
Dispute
START
Scenario –
Process
Execution Miss
Escalate to EP
Document
Dispute to
Partner
Document
Process Miss
Provide Function
Documented Miss
Partner
Govern
Process
Partner
Cure?
Review Dispute /
Attempt Cure
END
END
NO
YES
Partner
Govern
Process
Mediate Dispute /
Partner
Relationship Mgt
END
END
Review Dispute /
Investigate with A/
P and Function
OK to
Pay?
NO
YES
Req to
Pay
Process
Escalate to EP
Mediate Dispute /
Partner
Relationship Mgt
Post Deal PB Governance
Outsourcing
Steering
Legal
Enterprise
Procurement
Function/PMOPartner
Source: Enterprise Procurement, Strategic Alliances
Last Updated: 08 / 08 / 2005
Page 1 of 1
START
END
Process
RefDocumentActivity Decision
Maintain
Outsourcing
Artifacts / Metrics
START
Maintain Metrics
DashBoard
Maintain Partner
Capabilities
Assessment
START
Set PBI
Outsourcing
Strategy
Maintain
Outsourcing
Steering Charter
Maintain
Financial Benefits
Realization
Maintain
Governance
Processes
Conduct Partner
Relationship
Reviews
Partner
Governanc
e
Conduct PMO
Meetings with
Partner
Partner
Governanc
e
START
Identify
Outsourcing Need
New
Sourcing
Process
Approve New
Sourcing Deals
Approve CIPs
Approve High
Level Deal Terms
Approve Contract
Termination /
Extension
Guide Vendor
Consolidation
Goals
Monitor
Governance &
Benefits
Realization
START
START
Facilitate
Outsourcing
Steering Mtgs
Participate in
Outsourcing
Steering MtgsProvide Metrics
for Rollup to
Dashboard
Supplier Management Process (Post Deal Supplier Governance)
Outsourcing
Steering
Legal
Enterprise
Procurement
Function/PMOPartner
Source: Enterprise Procurement, Strategic Alliances
Last Updated: 08 / 08 / 2005
Page 1 of 1
Decision Document
Process
Ref
START
END
Activity
YES
Coordinate
Quarterly Partner
Relationship
Meetings
START Disputes?
NO
Maintain Issues
List
START
Manage
Functional PMO
Maintain SLA
Dashboard
Facilitate Monthly
PMO Mtgs with
Partner / EP
Participate in
Monthly PMO
Mtgs
Assist Function
with Open Issues
and Metrics
Participate in
Monthly PMO
Mtgs
Participate in
Partner
Relationship Mtgs
Participate in
Partner
Relationship Mtgs
Pull Together
Metrics, Open
Issues Across
Functions
PMO Metrics
Rollup
PB
Governance
Supplier
Scorecarding
Rollup
PB
Governance
END
Facilitate Partner
Relationship
Meetings
Demonstrate New
Capabilities
Forecast Demand
for Outsourcing
Dispute
Process
NO
Disputes?
Dispute
Process
YES
Update Partner
Capabilities
Assessment
Procurement Req to Pay Process
Outsourcing
Steering
Legal
Enterprise
Procurement
Function/PMOPartner
Source: Enterprise Procurement, Strategic Alliances
Last Updated: 08 / 08 / 2005
Page 1 of 1
Document
Process
RefActivity Decision
START
END
Create Shopping
Cart in B2B
Dispute
Process
Existing
Supplier?
YES
START
NO
Open New
Purchase Order in
SAP
Add Supplier to
SAP
Open new PO for
SOW amount
Services
Performed
according to SOW
Satisfied
with
Vendor?
YES
NO
Submit Invoice to
PB A/P
PO
Approved?
A/P Pays Invoice
NO
YES A/P: Is PO >
$750?
YES
NO
END
Approved
in B2B?
SOW
Required?
Ensure SOW
YES
Monitor
Approvals /
ReSubmit if
Necessary
NO
A/P: OK to
Pay?
Submit Goods
Receipt
YES
NO
New Project w. Existing Outsourcing Partner Process
Outsourcing
Steering
Legal
Enterprise
Procurement
Function/PMOPartner
Source: ADM, TechCentral Processes
Last Updated: 08 / 08 / 2005
Page 1 of 1
Document START
END
Activity
Process
RefDecision
Initiate New
Project
START
Scope New
Project
Draft Statement of
Work
Advise on SOW
Format / Content
Help Define
Scope / Estimate
Resources
CIP
Required?
Req to
Pay
Process
Negotiate SOW /
Pricing
Negotiate SOW –
Ensure
Consistency w.
Contract
Submit CIP
CIP
Approved
Submit Final
SOW to EP &
Legal
Submit
Requisition
File Final SOW –
Update Contracts
database
YES
NO
NO
YES
ENDNotified of New
Project by
Function / PMO
Review SOW for
Commercial
Terms
Approve SOW for
Legal Compliance
Scan & File SOW
New Sourcing - Requirements to Contract Process
Function/PMO
Enterprise
Procurement
Legal
Outsourcing
Steering
Partner
Source: Enterprise Procurement, Strategic Alliances
Last Updated: 08 / 08 / 2005
Page 1 of 1
Process
RefActivity Decision Document START
END
Initiate New
Sourcing Request
START
Initiate New
Sourcing Request
START
Assist w.
Requirements
DefintionAssist w. Sourcing
Strategy / Make-
Buy
Prepare for
Formal RFP
Perform Strategy /
Make-Buy
Decision
Project Manage
Sourcing Effort
Advise on RFP
Perform Vendor
Landscaping - RFI
Issue RFP
Deal
Define
Requirements
Draft CIP
Respond to RFI Respond to RFP
Evaluate
Responses
Update CIP
Negotiate
Contract
Negotiate
Contract
Negotiate
Contract
NO
YES
Approve Sourcing
Strategy
Advise on
Sourcing
Execution
Approve Deal
Execute
Contract / Update
Contract
database
Submit Non-
Disclosure if
needed
Draft Contract
Documents
END
Negotiate
Contract
Conduct Vendor
Due Diligence
Select Vendor

13. Copyright © 2007 IAOP. All Rights Reserved.
• Telemarketing Space - Following a
process for Win: Wins
– RFP
– QBR
– Strategic Expansion
Governance A Case Study

14. Copyright © 2007 IAOP. All Rights Reserved.
Criteria to achieve Objective – Risk Mitigation and Capability Expansion:
• Operations & Dynamics
– Relevant experience & Proven ability
– Training
– Account Management structure and quality
– Quality Assurance
• Infrastructure
– Reporting
– Technology current and ongoing investment
– Understanding of relevant technology road map and strategies
• Cost/Strategic Fit
– Viable agent compensation strategies
– Ability to be financially flexible
– Scalable
Governance A Case Study

15. Copyright © 2007 IAOP. All Rights Reserved.
• Team:
– Strategic Alliance Lead
– Business
– Subject Matter Experts as needed
• Phase 1
– Development of the detailed RFP document
– Identification of 6-10 vendor candidates for RFP distribution
• Phase 2
– RFP response evaluation summary and scoring matrix
– Narrow list to 3-5 Vendor finalist for on site oral presentations
– Narrow list to 2-3 Site visits
– Customer interviews for finalists
Governance A Case Study - Process

16. Copyright © 2007 IAOP. All Rights Reserved.
ORAL PRESENATION AGENDA
 Introductions - 15 minutes
 Open Discussion – Opportunity for vendor to expand on and further articulate their
case for being the right partner for this opportunity – 30 minutes
 Specific discussion on vendors applicable experience – 30 minutes
Overview of Organization stricture and how team will interact and support project -
30 minutes
 Account Management
 Training
 Quality Assurance – performance planning
 HR
 IT and Programming
 Describe how our program will fit within the structure and size of your organization
– 15 minutes
 What relationship and support do you anticipate needing from Us - 10 minutes
Governance A Case Study - Process

17. Copyright © 2007 IAOP. All Rights Reserved.
• Meet support staff
– Center Director
– Account management
– Floor supervisors
– Coaches
– Training
– QA
– Programming
– IT
– Reporting
• Center Tour
– Rep calling area
– Agent work stations
– Break rooms
– Security (Access to secure areas and
sensitive data)
– Training facilities
– Location of floor supervisors and
coaches
• Technology
– Location of servers
– Demo
– Agent management tools
– Agent screens & systems management
• Training
– Standard methodology
– Testing
– Physical resources (PCs, AV
equipment etc.)
• QA Dept.
– Department structure
– Process and how QA impacts rep
performance
– QA screens/Technology
– Scoring calls and feedback loop
– Supervisor’s role in QA
• Reporting capabilities
– Demo of reporting system
• Agent interaction
– Listen to live calls
– Roundtable
Governance A Case Study - Process
Site Visit Agenda

18. Copyright © 2007 IAOP. All Rights Reserved.
• Executive Review
– Current Priorities
– Thoughts on pricing options
– Thoughts on parallel/pilot programs
• Phase 3:
– Negotiations
– Contracts – MSA/SOW
• Phase 4:
– Launch
• Phase 5
– Continuously Review Space and new contenders
– QBRs
– Expansion of capabilities
Governance A Case Study - Process

19. Copyright © 2007 IAOP. All Rights Reserved.
QBR Agenda
• Q1 2007 in Review
• KPI Review
– Program 1
– Program 2
• KPI Improvements / Successes
• KPI Opportunities / Action Plans
• Quality
• Training
• Staffing
• Value Add / Future Activities
• Open Discussion
Governance A Case Study - Process

20. Copyright © 2007 IAOP. All Rights Reserved.
Repeatable Process Results
• Highest quality to date on outsourcing Project
• Best working relationship out of the gate
• Quick time to implement
• Risk Mitigated
• High response from stakeholders on repeatable process for future
projects
Governance A Case Study - Results