Outsourcing Partnership – Shared
PerspectivesJames Brodie, NFU Mutual,
UK
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“Testing For Real, Testing For Now”
Outsourcing Partnership
Shared Perspectives
Introduction
James Brodie
Test Manager/Service Delivery Owner
NFU Mutual
Introduction
This is a presentation based around an outsourcing project I have participated in within the last year.
This isn’t a sales pitch for a vendor.
This IS a talk about the challenges I have faced from inception through to the day to day running of the relationship.
This will be useful for anyone who is about embark on their own outsourcing/ relationship journey
What are you looking for
Outsourcing? Partnership?
•How much appetite/ capability do you possess for managing a day to
day relationship?
Why are we doing it
Remove constraints on skill and Full Time Employee FTE demand
requirements to address additional testing areas (e.g. non functional
testing)
Gain a greater and more efficient access to tooling and automation
Gain greater and more efficient access to test consulting
Allow internal capability to focus on the Intellectual Property (IP) of
running the NFUM core business and move their contribution up the
value chain
To provide flexibility to address variable demand across a number of
testing phases/requirements for additional testing areas
Achieve long term cost efficiencies for additional testing areas
What are we doing
Assess
Tangible and measurable results of alternative approaches
Robustness and flexibility to stand the test of time
Measure
Performance of the relationship using KPIs (e.g. productivity, quality, timeliness,
reporting, Others – downtime, support effectiveness, effectiveness of knowledge
management, etc)
Ability to meet common or specific business need
Validate
Phased approach driven by maturity levels to minimize risk and disruption, but
significant enough to deliver benefit (i.e. not a body shopping exercise)
How are we going to do it
Using all the work done to date formalise the activities to achieve an informed and
tangible closure
Create a simple capability assessment document, this should also include details of
any Proof of Concept (POC) dates and potential size etc
Identify a specialist suppliers that could work in partnership to help develop the best
strategy moving forward.
Use existing capability statements to help develop the understanding of viable models
and help formulate an initial strategy
Formalise engagement with these specialist suppliers, and in collaboration allow them
to demonstrate their tangible capabilities evidenced by maturity in the models by
using real life examples (in the insurance space)
An implementation plan for formalised POC(s) with a selected supplier
Verify the selection based on results of the POC(s)
Our Journey
The selection process
Qualifying selection
Living the relationship.
The Selection Process
A simple scoring matrix to gain hard and tangible results
A simple commercial assessment model to compare one partner with another etc.
Evaluation criteria should be developed prior to engagement to ensure honest and independent evaluation of partners
Set common challenges for suppliers to overcome via the capability statement, which can then be used for tangible evaluation
Suggestions of common challenges faced elsewhere.
Status
Oct 08 Oct 15 Oct 22 Oct 29 Nov 05 Nov 12 Nov 19 Nov 26 Dec 03 Dec 10 Dec 17 Dec 24
Overall Governance
Activity Initiation
Capability Statement
Establish Contractual & Commercial Framework
Stakeholder
Engagement
Kick-off Meeting 25/10/07
Pipeline Demand
Selection Timeline
Supplier NDAs *
Start to issue Supplier H/L* Capabilities
Supplier Assessments
Identify POCs
Set Customer/Demand Makers Expectations
Collate Commercial Information
Selected
Supplier
& POCs
Detailed
POCs
Plans
2007
LOI*/Heads
of Terms
Detailed Service Descriptions
Checkpoint
Go/No Go
21/12/07
Communication
Current and Future Business
Risk Profiling
Team Supplier Meetings
Relevant Client Case Studies
Identify Relevant
Clients 29/11/07
Team Client References
Request For Proposal (RFP)
Project Scope
Procedure
Benefit Realisation
Supplier History & Capability
Requirements
Relationship
Commercial Considerations
Exit Strategy
Contractual Requirements
Add Value And Innovation
Format And Presentation Of Responses
Audit And Control
RFP From The Vendors Perspective
• Understanding the needs of the Client
• Technology
• Domain
• Testing requirements
• Value addition
• Relevant prior experience
• Key personnel
• Key differentiators that the client can take away
Proof Of Concept (POC)
Objective
Outcome
Scope
Background Information
Methodology
Timelines
Metrics
SLAs
Success Criteria
POC – Vendors Perspective• First impression is the best impression
•Delivery
• On Schedule
• On Budget
• To the required standards/ quality
• Showcase
• Understanding
• Talent
• Experience
• Knowledge
• Go beyond stated client needs
•Gain an understanding of client pain points and organization
POC Scoring Matrix
Governance
• Effective framework to manage the relationship
• Key personnel
• Escalation mechanisms
• Conflict resolutions
• Identifying key metrics
• Account review mechanisms
• Reporting mechanism
• Change management
Governance – Vendors Perspective
Onsite Account Manager First point of escalation
Receiving all sourcing requirements from NFUM
Coordinating to get the right fit resources
Coordinating with NFUM Group IT Testing team to seek clarity on exact skill requirements, etc. and organize any interview that needs to be done
Ensuring agreed SLAs are met for resourcing
Relationship managementowns the business case
Program managementDrives the vision and strategic intent to a project level
Project Managementensuring the management of project delivery on everyday basis
Operational managementensuring the technical and quality compliance during delivery of the project
Key principles Transparency at all levels and forums
Periodic checkpoints, timely escalation and quick decision making
Living The Relationship
Procedures
Ensuring that you have your own procedures documented
Ensuring the procedures are explained and understood PRIOR to a
piece of work starting.
The vendor needs to know of any unique conditions of employment.
Service Level Agreements (SLAs)
Agreeing the terms of the SLA
Which of the SLAs will have the biggest impact on the business
Which of the SLAs will you deal with most commonly?
Have the SLAs been communicated to all the major stakeholders?
Living The Relationship
Integrating the teams
Moving away from us and them
Team building
Going as far as vendor staff managing NFUM staff
Knowledge retention/transfer
Between vendor and NFUM
Between vendor staff
Moving up the value chain and away from pure staff augmentation
Moving beyond Testing Service
Living The Relationship
Issue Resolution
Timely raising of issues
Willingness to work together
Confidence Building
Metrics
Reviewing of work
Impact on other relationships (e.g. contractors/agencies)
Communicating potential change to other parties
Living The Relationship
Management overhead
The need for a relationship owner to deal with day to day issues
Escalation points
Juggling business as usual with vendor management
Management liberation
The ability to hand over a piece of work with confidence.
Governance
Ensuring you follow the disciplines set down in the governance documents.
Being able to work to the spirit of the document rather than relying on it to resolve issues.
Living The Relationship
Moving offshore
Staff may worry about their jobs
Connectivity Issues
Ensuring communication procedures are in place.
Quality reviews
Metrics
Reporting structure agreed.
Living the relationship - measurement
The Vendors Perspective
Cultural Integration
NFUM specific knowledge
Speed
Process expectations e.g. Lack of formal capacity planning
Critical Success Factors
Investment in knowledge transfer
Investment in designated people for relationship management
Budgeting for initial teething problems
Periodic checks and balances
Key Objectives To Takeaway
Honest addressing of both teams’ questions will give you a far more
productive environment
Agreeing which metrics both companies use ensures expectations are
understood and agreed, and it allows you to implement SLAs.
Communication is the key to any engagement. By initially having some
tough talking it allows both sides to work within agreed parameters.
Questions