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1 _/ == =-. " :, : " : GOV RNAN Management Framework Continuous Im rovement Pro rams/stewardshi PUBLISHING BV ( all rights reserved

2 Alignment of Organization (chart) with:. CHent Organization - Business Units. Vendor Organization(s) - (counterparts). Governance Organization - Retained organization Define Governance (retained) organization:. Functions - thought leadership - marketintehigence Building accountability. Concept of Centre of Excellence Role Definition:. Three tier organizational structure - day-to-day, tacti.cal strategic. Roles and responsibilties - job descriptions Contract Management/negotiation:. Management skills development plans Skills templates Pricing templates (resources). Contract templates (subcontractor) Trainin Plans

3 People Management: Orientation and training -- program outline. Business/knowledge sharing - transition and cross training Continuity of resources/turnover change management process Skills development - planning, delivery - tracking tool/template. Career development - planning template. Performance management - review templates. Compensation Management - incentive/recognition/reward programs. Role definition templates and sample job descriptions. Contract templates -- including standard Ts&Cs Transition planning templates. Vendor Evaluation templates and processes. RFP templates and processes PUBLISHING BV (f 2000 all rights reserved

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5 ...,...""""''''''''''''''''..."..."'.."""'.""."...'.' I",,,,,,.,,,,,,,.,.,,,,...,,,,,,,,,,,,,,,,,,,,.,,,,,,,,,,,,,..,,,,,..,,..,.",. """... PUBLISHING BV (f 2000 all rights reserved

6 ... The role of the retained organization shifts from doing to managing and delegating - managers entrusted with managing outsourcing relationships have a manage, not to do desire Managers are champions of change with a proven ability and desire to build trust. Key management roles are defined to ensure appropriate level of key skills managers have solid communications, negotiation, strategic planning, project management, team leadership, and even marketing skills Continuous improvement is realized through joint action plans, follow-up and benchmarking against world-class standards of performance Ongoing communication mechanisms are in place to identify and resolve problems and facilitate continuous improvement There is a healthy recognition that /0 of failed outsourcing agreements are due to people conflict - conflict is given appropriate attention. Top down controls are replaced with empowered but accountable internal entrepreneurs - results driven team structures are established - strong matrix management is in place Formal plans are established for transition of responsibilities/transition of knowledge Employee incentive programs, recognition programs and reward programs are established and contribute to increased motivation and effectiveness. PUBLISHING BV (f 2000 all rights reserved

7 . Vendor and client share a common purpose and direction There is understanding, support, respect and trust in each other/each other s roles Communication is open, honest and effective There is an atmosphere where problems are positively confronted and resolved Decisions will need to be made on a continual basis that affect day40-day activities. Other decisions will impact the overall scope of services, as well as the overall tenor of the relationship. The management structure must support both of these.. The management structure defines how client and service provider organizations will work together to ensure success and, when necessary, take corrective action on less-than-desired outcomes. The client functional executive is responsible for ensuring that the organization realizes the value anticipated from the services provided. Multi-level teams exist, with day-to-day, tactical and strategic roles and responsibility defined Regularly planned meetings take place with predetermined agenda and consistent attendance - meetings are highly interactive resulting in identification and resolution of problems PUBLISHING BV (f 2000 all rights reserved

8 "..::.:.. Organizations invest in developing the new leadership skills demanded by outsourcing - for the retained organization Organizations retain responsibility for the delivery of key core functions. The organization chart is multi layered to be effective - strategic, tactical operational - with alignment between vendor and client organizations at every level. The Retained Organization does not typically represent more than 5 /0-1 overahoutsourced contract value Relationship Management represents 1 % - 3% of the overall outsourced contract value (part of 5% - 100/0 identified above) client. Vendor personnel receive ongoing training regarding the business and goals of the. Key. personnel for both the vendor and the client organizations have individual incentives related directly to organizational incentives, which in turn are aligned with business goals and objectives Role of relationship manager is treated as a specialized skill, supported by ongoing training, feedback, and continuous process improvement PUBLISHING BV (f 2000 all rights reserved

9 ~. - GOVERNANCE Management Framework Continuous Im rovement Pro rams/stewardshi :Zt;; PUBLISHING BV (f 2000 all rights reserved

10 Collaboratively define, develop, flowchart and document a set of management processes including:. Change Management Incident Management. Problem Management. Risk Management. Complaints Management. Dispute Resolution Project Management. Dev to Production migration. Contract Change Order Management Escalation Management. Service Request Management. Configuration Management Security Management. Financial Management. Contract Management. Innovation Process - business/technical Asset Manaaernent Establish shared understanding, integration, buy-in to processes - facilitation Clearly establish information flows, roles, responsibilities and accountability/ownership - for each process Review and continuously improve processes - documented flow/process Steward compliance to processes Integrate processes into operating environment across organizations - client, contractor, and governance organization - consulting/advising ff PUBLISHING BV (f 2000 all rights reserved

11 Processes should be cohaboratively developed, formally documented, officially endorsed and communicated, consistently applied and routinely evaluated for effectiveness Process costs represent about % of service delivery costs - focus process effectiveness and maturity it is the single most critical factor in service delivery savings Process represents the greatest opportunity for improved customer satisfaction the development of process improvement plans should be an ongoing focus Organizations need to determine where they expect to be operating - from a process maturity perspective -and be prepared to investthe time and the money to move toward that goal (Le. CMM and ISO) i: PUBLISHING BV (f 2000 all rights reserved

12 - _ -:-:::: GOVERNANCE ManagementFramework PUBLISHING BV (f 2000 all rights reserved

13 Expectation is set for continuous improvement with a proactive approach toward achieving it Collect and review actual performance, review and approve changes in services and scope, monitor end user satisfaction and drive continuous improvement in all aspects of the relationship and service delivery. Form.alized continuous improvement planning process Stewardship process for continuous improvement plans Executive endorsement Ownership and accountability Penalties and incentive programs PUBLISHING BV (f 2000 all rights reserved

14 Clients are seeking ways to improve the value delivered to customers from their organizations, while at the same time reducing their overall costs Outsourcing is a tool but it must be carefully managed in order to capitalize on the potential of the opportunity Outsourcing in many cases has not demonstrated the anucipated benefits that it first promised which is why it has become increasingly important to establish a strong foundation to build on Effective governance is becoming increasingly key to success in improving services, reducing. costs and realizing potential benefits Outsourcing produces a more complex environment and relationships to manage and clients need ongoing support to steward continuous improvement in service quality asweji as expected cost reductions Outsourcing must promote the entrepreneurial spirit more to be most effective - Le. incentives and rewards for success - tie bonuses to performance and the attainment of goals PUBLISHING BV (f 2000 all rights reserved

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