Partnering with third parties and vendor management at Kings College London
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1 Partnering with third parties and vendor management at Kings College London Contact Details This submission is submitted by Lucy Burrow and Lynne Tucker of IT Systems, Information Services at Kings College London. Contact: Kings College London Information Services and Systems Main Building Strand WC2R 2LS Telephone: Abstract Information Services and Systems (ISS) at Kings College London is working towards an ambitious change agenda delivering the Connected Campus programme while maintaining business as usual. ISS operates within a tightly resourced environment and services the needs of some 40,000 users. ISS has developed a strategy framework around multi sourcing and vendor management to ensure that sourcing options are reviewed and vendor management capability developed to build relationships and maintain them in order to establish strategic partnerships with suppliers and so that value for money can be realised. The development of this framework incorporates the appropriate management of over 80 maintenance and software contracts including two key partner vendors. Areas This award submission encompasses the areas of innovation, leadership, business management improvements, returns on investment and collaboration. Submission Outline The aim of this submission is to describe the background, development and implementation of the vendor management (VM) framework within ISS. The requirement for this strategic framework arose from a need to take advantage of the options presented by the market place and not rely on in house capability. This submission outlines the benefits and innovations in service delivery created as a result of working with managed third parties. The overall aims of this framework were to achieve: Best value from the variety of sourcing options currently presented in the market. The forming and maintenance of strategic partnerships with third party suppliers This strategic framework development was essential if ISS is to deliver the Connected Campus programme and services befitting a world class HE institution. 1
2 Scope (of the IT practice) ISS at KCL has traditionally delivered a large number of services and systems to the College community. In 2007 the inception of the Connected Campus programme required a massive change agenda, the delivery of key projects and the refresh of the College infrastructure. ISS recognised that in order to deliver elements of the programme in a timely and leading edge manner it was critical for the traditional model of delivering IT services in house to be reviewed. With the improvement of network quality and speeds and an increasing maturity in IT hosting, the current environment offers a variety of sourcing and IT delivery models. King s was well placed to take advantage of these developments given the level of IT infrastructure refresh that was required, and has already entered into a number of arrangements with thirdparties to deliver services using alternative models. Led by the IT Systems Management Team, the multi sourcing and vendor management framework was established within ISS with centralised processes developed. The IT Multi Sourcing Strategy established the transition from build to buy, ensuring that the marketplace is kept under review, that existing work streams are used to prioritise systems/services requiring purchase/development and enable the evaluation of delivery options. In order to complement and support multi sourcing, vendor management was defined to maximise vendor relationships through a combination of administrative and strategic management. ISS had a large number of maintenance and service contracts in place. Owing to the volume, changes in personnel and associated lack of knowledge about some particularly long standing contracts in addition to new complex contractual relationships coming to fruition the need to design and build VM capability quickly became paramount. Led by the Head of IT Policy and Process, an inclusive vendor management framework was established in ITS, the key features can be summarised as: Consistent ISS approach to VM Priority given to business critical contracts Identified roles and responsibilities (Service/contract owner) for each vendor relationship VM training for technical staff Risk management fed into SLAs Procedures for resolving and reporting on incidences of poor vendor performance Focus on continuous improvement via incentivisation (where appropriate) Recognition of the inter dependencies between contracts/vendors and systems Focus on relationship management and change management Early re negotiation of contracts Regular supplier meetings Overall, via working with third parties in a managed way, ISS aimed to ensure that best value can be gained from the marketplace and that partnerships with third parties are maintained, developed and maximised. By defining the level of vendor management required and training and empowering staff to manage vendors where appropriate, it was intended that this would lead to better services, using internal resource but complimenting this with managed outsourced solutions where appropriate. 2
3 Return on investment Efficiently operated multi sourced and vendor managed IT environments can bring many benefits. However, these ROI are often not directly related to cost reduction. The development of the framework itself cost very little other than KCL staff time to document and formalise the strategy, processes and core documents. Through assigning roles to service/contract owners the workload of VM can be spread, not just within ISS but also to business system owners where appropriate. Benefits to the department, institution and user community: As a result of the VM framework the number of managed contracts and relationships has increased significantly within ISS. The development of the VM calendar (highlighting when contracts are due for renewal) has enabled the early and considered re negotiation of contracts, thus saving money and enabling the appropriate consideration of longer term agreements. The establishment of roles in relation to contracts has meant that previous years invoices and payments have been analysed and compared to service/support received. Services no longer required have been removed again saving money this has included the refund for an out hosted test server that was paid for but never implemented and the review of an out hosted support contract which was cancelled and support brought back in house. VM has ensured that contractor performance is measured against contractual requirements, SLAs and KPIs resulting in improved value for money and continuous improvement in vendor service and delivery. Where systems are provided, in house monitoring has been set up to ensure objective data on performance. Working with third parties has increased business continuity with some services being delivered from outside central London, provisioned 24/7 support and improved resilience. The implementation of the VM framework has also enabled staff to develop new knowledge and skills in relation to reviewing contract performance as well as the opportunity to gain technical expertise and view different ways of working. The outsourcing of the electronic communications infrastructure has drastically improved incident response with KCL and third party staff working closely together on innovative solutions for fast resolution. The expertise of this third party has helped define technical architecture and is now actively involved in the strategic development of the identity management. Benefits to vendor suppliers: For third party suppliers the ROI has been more cooperative customer/provider relationships resulting in an improved understanding of the College s (and HEI s) needs, requirements and expectations. Where contracts are incentivised there is a real opportunity to realise financial benefit from vendor management. Vendors also have the opportunity to benefit from the receipt of positive feedback or references and the possibility of future work or collaborations. Demonstration of Excellence ISS has many contracts in place for goods, services and licences and therefore many vendor relationships which require management. In order for these relationships to be mutually beneficial and for excellence in all aspects of performance to be achieved a consistent vendor management programme needed to be developed and embedded. 3
4 Aim to ensure that relationships are built and maintained forming strategic partnerships with suppliers and that value for money is achieved. Achievements The Vendor Management strategy has been driven by significant changes in personnel within the IT Systems department over the last year and the need for delivery combined with efficient use of resources. Implementation of the VM framework is at an early stage with initial focus directed at business critical contracts and VM being built into procurement exercises and project strategy meetings. The VM Framework is flexible and provides for different levels of VM approach as appropriate to the risk and complexity of the contract. Strategic partnerships have been formed with our two key vendors in the form of five year contractual relationships. Were these achieved? The original aim has been achieved and the application of the VM framework continues to be widened to non business critical contracts. Transference of Best Practice Relationship to wider vendor management activity within the College The ISS vendor management framework was developed within IT Systems. However given that ISS runs services for the College and works closely with users of all levels, as work streams identify the need for improvements to existing services and the requirement for new systems, appropriate sourcing and vendor options can be explored. The College Purchasing Department has been keen to embed Contract Performance Management across the College to ensure; service delivery management, continuous improvement, relationship management and contract administration. The ISS vendor management strategy serves to simplify and embed College processes at a local level and ensure that staff roles and responsibilities are defined. Linkages to CPD and performance management programmes The transitioning of skill sets from build to buy is not easy and can be met by resistance from technical staff. The level of skills required to deliver and embed this framework demanded new strategic understanding of technical architecture and vendor management. By identifying service and contract owners for each service/system, this offers a development opportunity for staff which is built into induction, probation and appraisal. The very nature of working with third parties offers staff the opportunity to gain a better understanding of the marketplace but also to develop new knowledge of specific aspects of technology or service delivery e.g. specific software, aspects of identity management, security, networks etc. The capabilities required for building VM as a core development priority have been defined. Applicability to other HEI s The multi sourcing and vendor management framework have placed Kings at the forefront of HE with regard to out hosting/outsourcing. This leading edge approach was initially developed within IT Systems in order to ensure best value and excellence in delivery. Over time the framework will develop as contracts are reviewed and new services required. The framework is comprised of generic elements that could be applied to other institutions that wish to establish more managed and consistent methods of delivery. The core documentation could be used in relation to any technology related contract and the overall principles could apply to any department or institution looking to ensure excellence in their management and relationships with third parties. 4
5 Supporting Statement Information Services and Systems at King's College London is taking some bold steps in the delivery of central IT services to the College. In response to a number of challenges and drivers, ISS has entered into several innovative partnerships, ranging from international agile offshore software development to out hosting of large scale infrastructure over Janet (we believe we are the first HE institution to undertake this type of implementation). The Vendor Management framework has therefore been a key element in the move towards modern IT delivery, and the transition from a traditional "in house build" approach towards development of skill sets, processes and procedures which support a multi sourcing "buy" environment. The framework will be crucial in ensuring that KCL gains value for money from its contracts and relationships in the future. Although not a technical development, I believe that the approach demonstrates best practice in the areas of Innovation Leadership Business management improvements Return on investment Collaboration Lynne Tucker Chief Technology Officer Information Services and Systems King's College London 5
6 Appendix 1 Case Studies Case Study 1 delivery of a new electronic communications infrastructure outsourced to vendor partner. Identified as a business critical contract VM Approach Service Owner and Service Delivery Manager Identified. Change and Incident Management Process Shared issue register Systems monitoring (enables comparison against SLA) Scheduled: Technical staff visits to KCL/vendor site Monthly service reviews Quarterly reviews Annual opportunity to present KCL and vendor roadmap Annual account/contract review Infrastructure performance monitoring Case Study 2 review of the resourcing and support for a core business system Identified as a business critical contract Review of existing contract management approach Service Owner and Service Delivery Manager confirmed monthly service review (conference call) annual review with key account management roadmap presentation to review and align strategies Costs/benefit analysis carried out decision made to bring support back in house to reduce costs refund of 1 years payment for element of service not received 6
7 Appendix 2 Definitions and core documentation Defining the level of VM required The risk profile of a contract is a key factor in determining the level of vendor management required. The more important the contract, the more comprehensive the VM approach generally adopted. The VM approach should be considered during the course of procurement and project strategy meetings. The amount and frequency of VM reporting required will be dependant on the risk and complexity of the contract, with business critical contracts requiring most attention. Indicators of a business critical contract include: The key business function(s) significantly impacted by the failure of the contract The contract supplies essential goods or services to another business critical contract High overall risk assessment (combination of likelihood and impact of risk materialising) Typical features of contracts requiring significant VM input: Significant amount of contractor staff resource required Users are directly affected by the contract Quantitative/subjective measurement of vendor performance required e.g. the service may be up but has it been stable? Likely to have a relatively long duration (2 5 years) Relatively high value > 40,000 per annum. Core documentation Hosting services agreement Service level agreement (internal and external) Support definitions (including out of hours) Contract check lists (high level) to be used for future contracts. Risk register (in conjunction with the Project Office) Adapted change management process VM calendar (showing which contracts require renewal when) 7
8 Appendix 3 Connected Campus The Connected Campus is a three year programme designed to align all of the technological and information initiatives in ISS with the objectives outlined in the College s new 10 year Strategic Plan It will play a key role in underpinning and contributing to the College s vision of enhancing quality and distinction in all areas of business activity, supported by worldclass professional services and infrastructure. It articulates a portfolio of key activities that include: refurbishing the core IT infrastructure providing seamless anytime anywhere access to a diverse range of resources, applications and services improving research, teaching and administrative processes using the latest web technologies It envisages building a state of the art virtual campus for the College that connects people, information, services and knowledge; supporting mobility and enabling reliable 24 hour access and enhanced opportunities for collaboration. The College Strategic Plan emphasises the critical nature of a pervasive, highly available and accessible information infrastructure. IT Systems is looked to as an exemplar in developing that infrastructure, and this is central to meeting the expectations and information needs of College. 8
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