kenneth elong

IT Outsourcing - Tema: Sådan holder vi relationen på sporet

Vendor management, et spørgsmål om struktur eller mennesker?Kenneth Elong, Procurement Manager, Maersk Group IT Infrastructure Services

VENDOR MANAGEMENTA Question of Governance or People?

Agenda

1 Intro

2 Maersk and Vendor Management

3 Where Are We Going

4 People and Governance

5 Questions to Ponder

What Are We Here to Understand?

How do we keep the relationship on track?

1/20

My Background

Procurement Manager

Management Consultant

Solution Architect

Service Desk Team Lead

Vendor

Advisor

Client

Responsibility for our strategic IT supplier. Heading procurements of IT systems and services

(exiting contracts, vendor & contract management)

Advising clients on sourcing, contract and vendor management as well as IT procurement

Answering RFPs and advising clients on infrastructure expansions, renewal of estate, and new services

Kenneth Elong, 34

Worked with IT my entire career

Have a son

Run and swim

Live on Islands Brygge

2/20

Setting the Scene

1Insight into Maersk and how we do things at Maersk

Input to how governance and people are interlinked in making outsourcing a success

I do apologise when I make broad and unfair generalisations

I’ll be talking about infrastructure and larger applications

I’ll be referring to cases I’ve seen across a range of companies

I’m talking to you as though you are the customer, not the vendor

Takeaways Please Note

2

1

2

3

4

3/20

Signing, Managing, and Exiting Contracts

Sign Contract

Risk

Optimisation

Contract

Negotiation

Service

Monitoring

SupportContract

Review

Vendor

Management

Exit

Preparations

Re-tender

Exit

New Contract

Value

Optimisation

Procurement Manager

Contract Owner

Contract Manager

Procurement Contract & Vendor Management Re-Tender

RFP/RFI

Procuring IT services and signing of contracts Managing and monitoring of contracts as well as renegotiation and optimisation

Exiting and re-tendering

5/20

Situation, Complication, Question

High Switching Costs

Highly Knowledge Based Environment

We operate in an environment characterised by:

Complex Contract(s)

Uncoupled from Business Requirements

Static Mechanisms in a Changing World

Complex Integrated Services

• Value leakage

• Difficult to track vendor performance

• Exit is ill prepared for

• Multiple vendors with unaligned agendas

• Issues with financial control and forecasting

• Complex structures to navigate

How do we keep the relationship on track?

6/20

Where Are We Going7/20

Where Are We Going8/20

Understanding Your Vendor

$

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How is the vendor’s Profit/Loss build?

What behaviour are you motivating with your remedies?

Are you paying for your service?

Why is there little Continued Service Improvement?

Why is there little innovation?

Why is there little proactivity and few optimisations?

Are you requesting standard services?

Is there alignment between sales and operation?

How is your account prioritised in the vendor organisation?

9/20

How is the vendor’s P&L build?10/20

What Behaviour are You Motivating with Your Remedies?

Server Availability: 99,8%

Service Windows: 4 hours per month, more will count as down time

Patching: All servers must have recent patches applied

What Behaviour is expected from the vendor?

Application Availability: 99,8%

Service Windows: as needed

Remedies: Broken application SLA is calculated into service credits

A plan to remediate must be delivered within 5 work days for servers not patched with recent patches

Remedies: Broken server SLA is calculated into service credits

Patching: All servers must have recent patches applied

11/20

Are you paying for your service?12/20

Are you requesting standard services?

Standard Service

Non-Standard Service

Time to Delivery Cost

$

$

Optimising & Maintaining

13/20

Is there alignment between sales and operation?

Sales Operation

1 2

Sales Operation

Design Transition Operation CSI

14/20

How is your account prioritised in the vendor

organisation?Top Accounts

You?

15/20

People and Governance

Governance Provides Us With

Clarity

Processes

Structure

But in a changing ambiguous world we also need

People to Handle

Exceptions

Changes

Uncertainty

16/20

Important Aspects of Governance

1 Well known and well proportioned

2 Authority assigned to correct levels

3 Rightly prioritised by organisation

4 Processes described

- Not only the people involved in governance need to know the organisation

- Sized based on strategic value to the organisation

- Authority is pushed downwards in the organisation

- Continuous focus and evolvement of governance

- Resources assigned both in form of people as well as investments

- Processes to support the governance are described, communicated and centrally accessible to all

17/20

Important Aspects of People

1 Capabilities to match

2 Converting exceptions

3 Partnership Spirit

4 Communicate and align expectations

IT

Finance Legal

IT- Exceptions will always exist, but

converting poorly described cases into standard processes

- Understand the priorities of each other

- View vendor as extended team

- Communicate often with counterparts

- Communicate openly and honestly

- Ensure that expectations are aligned

18/20

Governance or People19/20

PeopleGovernance

Questions to Ponder

Are we Strategic for the vendor?

Is your organisation build for success?

Are you focusing on enhancing your capabilities?

Are you a good and fair customer?

20/20

Questions

kenneth elong

Technology