090119 Enabling Strategic Sourcing

Han Driessen
Han DriessenPartner em BlinkLane Consulting
BlinkLane Consulting
                               Enabling Strategic Sourcing




BlinkLane Consulting
Amsterdam, Netherlands



                         1
BlinkLane in short
•   BlinkLane is an independent consulting organization which
    focuses entirely on the organization and management of IT.

•   BlinkLane is the only consultancy organization to focus on
    improving !capabilitiesquot; in an IT value chain as the basis for
    enhancing business performance.

•   BlinkLane services focus on

    •   Organizing IT Excellence

    •   Enabling Strategic Sourcing

    •   Aligning IT Strategy



                                                                     2
Our Vision           ‘Capability drives Performance’

•   The key to adding business value with IT is in the capabilities
    of the IT organization (or better; of the IT Value Chain).


     BUSINESS                               BUSINESS
     STRATEGY                           PERFORMANCE




      IT STRATEGY    IT CAPABILITIES   IT PERFORMANCE




•   We define capabilities as the complete set of knowledge, skills,
    processes, attitude and culture of individuals and

                                                                       3
    organizations, that can be utilized to influence the performance
    of an organization.
4
    Our Strategic Sourcing Practice
                                                STRATEGY &
                                                 SCOPING




                                                                      SELECT
                               MONITOR

                                                 DEVELOP
                                                 SOURCING
                                                CAPABILITIES




                                     TRANSFER                  CONTRACT
5          Sourcing a phased approach
BlinkLane helps it’s
                                                 STRATEGY &
clients to establish                              SCOPING
effective IT sourcing
relationships.

                                                                       SELECT
                                MONITOR
BlinkLane helps its clients
                                                  DEVELOP
to improve the organization’s                     SOURCING
                                                 CAPABILITIES
own sourcing capabilities,
enhancing the success of
current and future outsoucing
relationships.
                                      TRANSFER                  CONTRACT
6                Strategy & Scoping (1)
Goal
To define and agree upon drivers (goals) for sourcing-decisions and feasible/preferred scenarioquot;s for sourcing relationships
that add maximal value.

Activities
•       Define sourcing drivers, with reference to the business strategy, the IT organization's level of ambition, the existing
        IT capabilities, market developments and market trends.
•       Define and analyze sourcing scenarioquot;s, against the sourcing drivers. These scenarioquot;s include the sourcing scope
        and the choices for in-house, outsourcing, offshoring, etc.
•       Define high level definition of the sourcing management and governance.
•       Analyze feasibility of scenarioquot;s; including alignment with the sourcing drivers, the business case and risk analysis.
•       Select preferred sourcing scenario(s), and prepare decision-making for stakeholders and inform OR.
•       Define sourcing approach for establishing future sourcing relations.

Results
•      Clear and agreed sourcing drivers.
•      Definition of preferred sourcing scenario, including definition of internal sourcing management.
•      Business Case and Risk Analysis.
•      Decision for (out)sourcing (parts) of IT services.
•      (Out)sourcing approach and communication plan.
Strategy & Scoping (2)
•   Because the phase Strategy & Scoping is the essential first step for making
    potential (out)sourcing a success, we have added more information on our
    approach for this phase below:

                                                            STRATEGY & SCOPING


                           Why ?                   What ?                   How ?



                           Determine strategic drivers
                                                                   Test feasibility and              Decision
                              and select sourcing
                                                                plan sourcing approach               making
                                  scenario's



                          Sourcing Drivers                    Optional: Request for Quotation    Decision making
                          - Drivers                           - RFQ document                     document
                          - Pre requisites and condtions      - Quotes by suppliers
                                                              - Bid feasibiity from the market   Decision making
                          Sourcing Scenario's                                                    by stakeholders
                          Sourcing Scope                      Optional: Benchmark
                          - Sourcing scenario's/              - Detailled banchmark prices       Informing the OR
                            responsibilities
                          - ICT Objects                       Business Case
                          - ICT Activities                    - Business case




                                                                                                                    7
                          - Priorities                        - Assumptions

                          Vendor Policy                       Risk Analysis
                          - Type of Vendor                    - Risks and mitigations
                          - Number of Vendors
                                                              Sourcing Approach
                          Sourcing Management                 - Fases and timing
                          - Basic Design                      - Projectteam
                          - Capability Gap                    - Dependencies
8                Selection
Goal
Select supplier(s) that offers a solution that optimally fits the drivers for outsourcing.

Activities
•       Define detailed scope of lots that are being outsourced, including definition of IT objects, IT processes, IT service
        requirements, personnel aspects, financial requirements, compliance requirements and legal requirements.
•       Detail future internal sourcing management roles, responsibilities and processes.
•       Define draft outsourcing contract as a means to further concretise- and communicate requirements, and accelerate
        up process towards contracting.
•       Select supplier(s) using a structured process of for example RFI, RFP or benchmarked bidding process.
•       Perform mutual due dilligence process with one or more suppliers.
•       Update Business Case and Risk Analysis.

Results
•      Detailed scope for outsourcing.
•      Blueprint of future internal sourcing management; roles, responsibilities and processes.
•      Draft outsourcing contract.
•      Scoring results for different proposals from suppliers.
•      Due Dilligence results.
•      Selected preferred supplier(s) to continue with, in the contracting phase.
9                Contracting
Goal
Optimally contract supplier(s) for the to be outsourced IT services.

Activities
•       Definition of contracting strategy.
•       Prepare negotiation and contracting.
•      Negotiate contract and underlying agreements for transfer of assets, transfer of personnel, pricing, service level
       agreements, governance guidelines, etc.
•      Achieve agreement with OR and Unions.
•      Update Business Case and Risk Analysis.
•      Define transfer plan.

Results
•      Outsourcing contract and underlying agreement.
•      Contracted supplier(s).
•      Transfer plan.
•      Social protocol for harmonization of terms of employment.
•      Plan for recruiting (new) people for the sourcing management !organizationquot;.
10                 Transfer
Goal
Transfer the IT services, assets and personnel to the supplier and ensure the correct operation of the sourcing relationship
across the IT Value Chain.

Activities
•       Plan transfer of IT services, assets and personnel to the supplier.
•      Staff and train the internal sourcing management (roles, responsibilities and processes).
•      Simulate and train cooperation across the IT value chain (user organization, internal IT and sourcing management,
       external supplier).
•      Execute transfer.
•      Evaluate transfer and initial operation.

Results
•      Trained internal personnel sourcing management.
•      Transferred IT services, IT Assets and personnel.
•      Supplier is responsible for delivery.
11                 Develop Sourcing Capabilities
Goal
Develop the organizationquot;s own sourcing capabilities in line with the strategic objective of the organizations. This to ensure
the success of current and future outsoucing relationships.

Activities
•       Align/define the ambition of the organization in terms of needed capabilities to ensure success with (out)sourcing.
•      Align/define performance indicators that measure success of (out)sourcing and the basis for improving the
       organizationquot;s sourcing capabilties.
•      Scan/assess current sourcing capabilities.
•      Plan improvements of the organizationquot;s sourcing capabilities.
•      Interactively develop sourcing capabiities (during the phases selection, contracting and transfer).
•      Monitor sourcing performance and sourcing capabilities.

Results                                                                            ALIGN

•      Insight into the capability gap (current versus needed).
•      Improved internal organizationquot;s capabilities.
                                                                       SCAN                     DEVELOP             MONITOR




                                                                                   PLAN
12                 Monitor
Goal
To track the performance of the sourcing relationship throughout the term of the outsourcing.

Activities
•       Monitor performance of IT delivery across the value chain.
•       Monitor supplier performance using audits and benchmarks.
•       Help improve performance of outsourcing relationship and performance across the IT value chain.

Results
•      Insight and improvement of the performance of the supplier.
•      Insight and improvement of the performance of the entire IT value chain.
13
     BlinkLane Sourcing Delivery
14         Highlights of our approach
•   A phased approach for outsourcing.
•   Fact based, result-oriented, with consideration and focus on the organizationquot;s
    own capabilities.
•   Using templates and best-practices for every phase.
•   In close cooperation with the client.
•   BlinkLane effort is always a team effort.
•   We add specialists to the project team for specific aspects during the sourcing
    process, when needed.
BlinkLane Consulting
         Adam Smith Building
      Thomas R. Malthusstraat 1-3
         1066 JR Amsterdam

          T: +31 20 408 08 60




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090119 Enabling Strategic Sourcing

  • 1. BlinkLane Consulting Enabling Strategic Sourcing BlinkLane Consulting Amsterdam, Netherlands 1
  • 2. BlinkLane in short • BlinkLane is an independent consulting organization which focuses entirely on the organization and management of IT. • BlinkLane is the only consultancy organization to focus on improving !capabilitiesquot; in an IT value chain as the basis for enhancing business performance. • BlinkLane services focus on • Organizing IT Excellence • Enabling Strategic Sourcing • Aligning IT Strategy 2
  • 3. Our Vision ‘Capability drives Performance’ • The key to adding business value with IT is in the capabilities of the IT organization (or better; of the IT Value Chain). BUSINESS BUSINESS STRATEGY PERFORMANCE IT STRATEGY IT CAPABILITIES IT PERFORMANCE • We define capabilities as the complete set of knowledge, skills, processes, attitude and culture of individuals and 3 organizations, that can be utilized to influence the performance of an organization.
  • 4. 4 Our Strategic Sourcing Practice STRATEGY & SCOPING SELECT MONITOR DEVELOP SOURCING CAPABILITIES TRANSFER CONTRACT
  • 5. 5 Sourcing a phased approach BlinkLane helps it’s STRATEGY & clients to establish SCOPING effective IT sourcing relationships. SELECT MONITOR BlinkLane helps its clients DEVELOP to improve the organization’s SOURCING CAPABILITIES own sourcing capabilities, enhancing the success of current and future outsoucing relationships. TRANSFER CONTRACT
  • 6. 6 Strategy & Scoping (1) Goal To define and agree upon drivers (goals) for sourcing-decisions and feasible/preferred scenarioquot;s for sourcing relationships that add maximal value. Activities • Define sourcing drivers, with reference to the business strategy, the IT organization's level of ambition, the existing IT capabilities, market developments and market trends. • Define and analyze sourcing scenarioquot;s, against the sourcing drivers. These scenarioquot;s include the sourcing scope and the choices for in-house, outsourcing, offshoring, etc. • Define high level definition of the sourcing management and governance. • Analyze feasibility of scenarioquot;s; including alignment with the sourcing drivers, the business case and risk analysis. • Select preferred sourcing scenario(s), and prepare decision-making for stakeholders and inform OR. • Define sourcing approach for establishing future sourcing relations. Results • Clear and agreed sourcing drivers. • Definition of preferred sourcing scenario, including definition of internal sourcing management. • Business Case and Risk Analysis. • Decision for (out)sourcing (parts) of IT services. • (Out)sourcing approach and communication plan.
  • 7. Strategy & Scoping (2) • Because the phase Strategy & Scoping is the essential first step for making potential (out)sourcing a success, we have added more information on our approach for this phase below: STRATEGY & SCOPING Why ? What ? How ? Determine strategic drivers Test feasibility and Decision and select sourcing plan sourcing approach making scenario's Sourcing Drivers Optional: Request for Quotation Decision making - Drivers - RFQ document document - Pre requisites and condtions - Quotes by suppliers - Bid feasibiity from the market Decision making Sourcing Scenario's by stakeholders Sourcing Scope Optional: Benchmark - Sourcing scenario's/ - Detailled banchmark prices Informing the OR responsibilities - ICT Objects Business Case - ICT Activities - Business case 7 - Priorities - Assumptions Vendor Policy Risk Analysis - Type of Vendor - Risks and mitigations - Number of Vendors Sourcing Approach Sourcing Management - Fases and timing - Basic Design - Projectteam - Capability Gap - Dependencies
  • 8. 8 Selection Goal Select supplier(s) that offers a solution that optimally fits the drivers for outsourcing. Activities • Define detailed scope of lots that are being outsourced, including definition of IT objects, IT processes, IT service requirements, personnel aspects, financial requirements, compliance requirements and legal requirements. • Detail future internal sourcing management roles, responsibilities and processes. • Define draft outsourcing contract as a means to further concretise- and communicate requirements, and accelerate up process towards contracting. • Select supplier(s) using a structured process of for example RFI, RFP or benchmarked bidding process. • Perform mutual due dilligence process with one or more suppliers. • Update Business Case and Risk Analysis. Results • Detailed scope for outsourcing. • Blueprint of future internal sourcing management; roles, responsibilities and processes. • Draft outsourcing contract. • Scoring results for different proposals from suppliers. • Due Dilligence results. • Selected preferred supplier(s) to continue with, in the contracting phase.
  • 9. 9 Contracting Goal Optimally contract supplier(s) for the to be outsourced IT services. Activities • Definition of contracting strategy. • Prepare negotiation and contracting. • Negotiate contract and underlying agreements for transfer of assets, transfer of personnel, pricing, service level agreements, governance guidelines, etc. • Achieve agreement with OR and Unions. • Update Business Case and Risk Analysis. • Define transfer plan. Results • Outsourcing contract and underlying agreement. • Contracted supplier(s). • Transfer plan. • Social protocol for harmonization of terms of employment. • Plan for recruiting (new) people for the sourcing management !organizationquot;.
  • 10. 10 Transfer Goal Transfer the IT services, assets and personnel to the supplier and ensure the correct operation of the sourcing relationship across the IT Value Chain. Activities • Plan transfer of IT services, assets and personnel to the supplier. • Staff and train the internal sourcing management (roles, responsibilities and processes). • Simulate and train cooperation across the IT value chain (user organization, internal IT and sourcing management, external supplier). • Execute transfer. • Evaluate transfer and initial operation. Results • Trained internal personnel sourcing management. • Transferred IT services, IT Assets and personnel. • Supplier is responsible for delivery.
  • 11. 11 Develop Sourcing Capabilities Goal Develop the organizationquot;s own sourcing capabilities in line with the strategic objective of the organizations. This to ensure the success of current and future outsoucing relationships. Activities • Align/define the ambition of the organization in terms of needed capabilities to ensure success with (out)sourcing. • Align/define performance indicators that measure success of (out)sourcing and the basis for improving the organizationquot;s sourcing capabilties. • Scan/assess current sourcing capabilities. • Plan improvements of the organizationquot;s sourcing capabilities. • Interactively develop sourcing capabiities (during the phases selection, contracting and transfer). • Monitor sourcing performance and sourcing capabilities. Results ALIGN • Insight into the capability gap (current versus needed). • Improved internal organizationquot;s capabilities. SCAN DEVELOP MONITOR PLAN
  • 12. 12 Monitor Goal To track the performance of the sourcing relationship throughout the term of the outsourcing. Activities • Monitor performance of IT delivery across the value chain. • Monitor supplier performance using audits and benchmarks. • Help improve performance of outsourcing relationship and performance across the IT value chain. Results • Insight and improvement of the performance of the supplier. • Insight and improvement of the performance of the entire IT value chain.
  • 13. 13 BlinkLane Sourcing Delivery
  • 14. 14 Highlights of our approach • A phased approach for outsourcing. • Fact based, result-oriented, with consideration and focus on the organizationquot;s own capabilities. • Using templates and best-practices for every phase. • In close cooperation with the client. • BlinkLane effort is always a team effort. • We add specialists to the project team for specific aspects during the sourcing process, when needed.
  • 15. BlinkLane Consulting Adam Smith Building Thomas R. Malthusstraat 1-3 1066 JR Amsterdam T: +31 20 408 08 60 15