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VMO - Relationship Management Scorecard

VMO Services & Relationship Management Scorecard
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on 23 November 2012

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Transcript of VMO - Relationship Management Scorecard

Manages Services Scorecard
Managed Services Scorecard provides the ability to measure the value of relationship objectives between both parties
It is a consistent and concise tool, which spends time managing the relationship – & not the data Background 20 years of transforming global enterprises using Technology
Experience in 20+ countries, multi-lingual, multi time zone environment
Team of 300 (ISO 9001:2008)
Key practice areas:+ resources and growing
ISO Certified Processes
Sourcing Advisory (services rendered under “Sourcing Gurus” brand)
Technology Solutions
Oracle E-Business
Support & Helpdesk IT Business Management
The IT Business Management discipline is about running the “Business of IT
IT BM enables to plan, forecast, track, and mitigate the risk of delivering those services Defining the “Problem” CIO’s are strained to capture the “Value of IT” and articulate it to their internal business partners
Struggle to link the long-term goals of IT to the business strategy
Unable to facilitate objective prioritization of the organization’s capabilities
Toothless to change investment decisions to service levels, customer satisfaction, and return
Challenged to diagnose chronic lack of performance or in-effectiveness
Powerless to Effectively Oversee Outsourcing and Managed Services (Governance)*
Hard to define and implement across all areas
Always underestimated (time, investment, and structural architecture)
Oversight and administration tends to be an afterthought
Lack of governance makes vendors adversaries, not collaborators Systems Plus Solutions Systems Plus offers 2 services for your business solutions Case Study About:
A Retail company with 2 business units $3.5 Billion Retailer / Wholesaler
Using a “Shared Services” approach for IT Services (Support and Project)
Approximately 500 enterprise systems & 150 FTE supporting those systems
Completed vendor selection for an outsourcing partner with Systems Plus in 2008-2009
“Retail Customer” did not have an IT Vendor Management Office prior to the outsourcing transition
Defining the Problem:
Did not measure or have the processes to support the previous outsourcing relationship
The outsourcing partner provided service metrics, but with no aggregation or linkage
“Retail Customer” collected Time and Financial information, but could not correlate it to outsource performance The Approach Compiled the goals and objectives from the outsourcing partner selection, the business case, and the IT strategy
Concentrated on Finance, Service Delivery (support), & Resource Management
Used the Sourcing Gurus inventory of Objectives and Measures, then identified the processes to support and collect the data on a monthly and quarterly basis
Identified other “target” measures to align processes to gather data in the future
KEY: Met with outsourcing partner to agree upon the objectives, measures, and targets
Modified the outsourcing partner contract to reflect measures and target service levels
Set up the Objectives and Measures in the tool The Opportunity - Managed Services Scorecard Use a Scorecard approach to measure the value of a Managed Services Offering. The benefits include:
Provides CIO’s a clear line of sight from their IT Objectives to Managed Services
Use of a framework to correlate IT Themes to Managed Services Offerings
Gives CIO’s a tool for communicating:
The link between Investments in the Managed Services offering IT and Business Strategy
Processes and systems required for implementing the strategy
Investment priorities for capabilities that drive value
Qualitative and quantitative status of the Managed Services offering
Draws a cause and effect road-map to customer value – the CIO and his/her organization The Value – Optimization The Scorecard “Continuously Improves” the Outsourcing Relationship Value for the Client:
The ability to measure without significant increase in internal costs
Measures that are agreed upon with emphasis on the appropriate metrics
Consistent method of reporting for all providers
A historical record, in a database, for you and your team to access
A central repository for your team to input analysis at every
A complete view of the outsourcing relationship The Value – Return Examples Scorecard Screen-shots The Scorecard – Themes, Weights, and Analysis The Scorecard – 4-Quadrant Comparative View Four Quadrant Comparison Screen : Additional Metrics The client and provider can save on investing in governance effort:
Time savings on monthly governance
As much as 50% reduction in time spend on governance material preparation
Time re-focused on relationship management and driving value from the model
Measuring the relationship will provide hard savings re-investment opportunities:
Value-add services from the provider
Services performed to evaluate initiatives in the strategic portfolio
Services performed to maximize productivity and increase performance of the systems
Maximizing On/Off-Shore Ratio, Blended-Rate
Improvements in contract types
Maximize the amount of capacity and services in a multi-year core contract
Minimize the amount of Capacity Leakage / non-utilized hours in a hours-based contract Four Quadrant Comparison Screen : Company-Vendor Detail Finance:“Optimize Core Spend vs. Variable” compared Time & Materials spend compared to Fixed-Bid base
Revealed a 125% Time & Materials spend as compared to Fixed-Bid
Able to leverage a volume discount for quarterly hours credits and annual rate decreases
Year 1 hours credit was $40k, and Year 2 volume discount was over $500k
Service Delivery:
“Reduce Negative Impact on Business Continuance” monitored ticket resolution and back-log
Attrition and Capacity Leakage increased ticket backlogs and resolution times
Provided the objective-based view of negative impacts despite additional spend on projects
Resource Management:
“Decrease Capacity Leakage and IP Loss” monitored turnover and resources unavailable for work
Revealed an unplanned attrition rate of more than planned (over 6%) and an average resource utilization of 95%
Able to leverage 5% leakage rate to get an over-utilization and make up hours
Able to leverage the attrition rate to get additional knowledge transition time at no cost The Value
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