can I consolidate vendors, align performance with company objectives and build trusted relationships?

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1 SOLUTION BRIEF Vendor Performance Management can I consolidate vendors, align performance with company objectives and build trusted relationships? agility made possible

2 CA Business Service Insight helps you automate and govern vendors for outsourced services. As a result you are better able to align performance to expectation, consolidate the number of vendors and build trusted vendor relationships. 2

3 Challenge Companies are increasingly outsourcing both traditional and cloud based services to third-party vendors in an attempt to save costs and improve productivity. This trend is on the rise, and despite the fact that these companies are still responsible for the business functionality provided by the vendor, most companies manage these relationships primarily using an ad hoc approach to establishing and monitoring the underpinning contract, and not as part of an overall outsourcing strategy. They lack the ability to actively monitor and manage these outsourced services in a way that allows corporate objectives to be met and are lacking a structure for IT vendor management for these mission critical relationships. Opportunity With more and more businesses facing this challenge of governing an increasingly outsourced IT infrastructure, there is an immediate need for them to manage these outsourced relationships so that maximum value is retained for the company without simultaneously overtaxing the vendor in the process. Companies are seeing there is opportunity to tie their vendor contracts to overall business objectives, and thus make them truly valuable extensions of the business. Now is the time for them to establish internal expertise for managing this new vendor model and to put into place a dependable delivery infrastructure, where there is transparency between vendors and the company. With an end-to-end vendor management infrastructure and strategy, a business can determine how their outsourced relationships affect their business performance and improve the delivery of goods and services to their customers. Benefits CA Business Service Insight provides the infrastructure framework to effectively manage a company s multiple outsourced solutions, from relationship management, to performance monitoring. The benefits include: Tracking of vendor performance across IT services, projects and infrastructure delivery Identification, prevention and mitigation of supply risk Rationalization of vendors based on performance as well as on cost Development of internal expertise for improved management of outsourced IT services Improved communication and more effective management of vendors through better understanding of the business impact of vendor solutions on the company s bottom line Understanding of what penalties we are due or earn-backs are owed CA Business Service Insight will allow companies to align their vendor relationships with business objectives, improving overall vendor performance, disengaging with low performers and gaining insights that help vendors and suppliers improve their performance and reduce costs and risks. Managing vendor performance with CA Business Service Insight can reduce the number of vendors by up to 30%, the number of unique vendor/service combinations by up to 25%, and the number of base services by 40% by automating and standardizing the tracking of vendor performance across IT Services, projects and infrastructure delivery. 3

4 Section 1: Challenge Deciding to buy or build your services Pressure to improve operational performance, and drive down cost is steadily increasing. This brings scrutiny to both IT operations and business practices. As a result, many have turned to multi-sourcing strategies to outsource portions of the IT infrastructure and business processes. In fact, sourcing IT and business services, project delivery and infrastructure is everywhere in large enterprises today. Everyone is considering buying instead of building. While the day-to-day business for these outsourced activities is in the hands of an external vendors or suppliers, the company itself retains the ultimate responsibility for performance. Internal and external customers do not care, for instance, if an outage in their critical application is caused by an infrastructure failure with IT or with a Platform-as-a-Service (PaaS) vendor. They only know it causes business costs and risk. As a result, these contracts and relations must be actively managed in order to reduce risk and create value for the company. They must ensure that the performance levels match the requirements of their own internal and external customers. Moreover, companies need to be able to understand, prevent or mitigate, the supply risk associated with missed targets, and need to be able to improve their ability to understand service characteristics when the need to rationalize vendors becomes evident. Section 2: Opportunity Manage your vendor performance with CA Business Service Insight CA Technologies helps empower users to extend their IT vendor performance management capabilities by leveraging a standards-based, top-down approach to managing these relationships. With the solution, a company is able to proactively define the performance characteristics of outsourced services along with the standard metrics that might be used to measure this performance. The company is then able to leverage these characteristics to define underpinning contracts with their outsourced vendors, proactively monitor each vendor s performance against the commitments in these contracts, and automate performance reporting with each vendor. As this process is proactive, the company is able to correct vendor performance issues during the reporting period rather than waiting till the next one. 4

5 Figure A. CA Business Service Insight takes a process based approach to managing outsourced relationships As a result, this single source of truth helps companies reduce performance conflicts and build trusted vendor relationships. In cases, where low performers need to be replaced, the company is better able to define desired characteristics thus improving vendor competitiveness. Section 3: Benefits Consolidate vendors, improve vendor management financials, and align performance CA Business Service Insight enables companies to realize benefits by standardizing outsourced service profiles, automating performance management and creating a collaborative environment upon which to build trusted vendor relationships. Standardize outsourced service profiles By standardizing outsourced service profiles, a company is able to reduce the number of services permutations that need to be supported. You can: Standardize the performance requested from potential vendors and foster vendor competition Improve productivity for contract creation by 50% - 60% 1 Improve data collection and reporting Reduce the total number of services to be supported by up to 25% 2 5

6 Automate performance management Data from the vendor environment is used to automatically track performance against vendor commitments. By automating this performance, a company is able to hold vendors accountable. This enables you to: Improve penalty collection by 25% - 35% 2 Reducing the risk of downstream service outages Ensure veracity of supplier provided information Improve Penalty Collection 25% to 30% Reduce the amount of time reconciling vendors reports Create collaborative environment between company and vendor By moving from a reactive reporting environment to one where companies are able to proactively manage vendor performance, the company is able to: Reduce latency of supplier performance corrections Consolidate vendors Create trusted vendor relationships which extend your internal service capabilities Section 4: The CA Technologies advantage CA Business Service Insight is an innovative software solution for managing IT service performance. The solution empowers companies to better articulate the value of IT in business terms including understanding service performance from the top down, integrating service and service level performance management and leveraging service ratings and comparisons. While other technology companies offer point solutions that manage cost and performance issues of the individual infrastructure elements of traditional IT services, CA Technologies enables companies to determine what services are being utilized and how they re performing against SLAs, and compare them with both internal and external alternatives. This means a company can reduce the risk of unknown services, improve performance of services and SLAs, and identify the service options that will further optimize your business. The solution also builds on its Service Level Management domain expertise to manage performance obligations in service level agreements, operational level agreements and underpinning contracts. Designed for enterprises and service providers, CA Business Service Insight enables companies to reduce cost and increase performance of their overall service infrastructure by providing visibility to both the IT supply chain and service obligations. 6

7 Section 5: Next steps To learn more about CA Business Service Insight and how you can benefit from the solution and rapid time-to-value, please visit us at ca.com/businessserviceinsight. CA Technologies (NASDAQ: CA) provides IT management solutions that help customers manage and secure complex IT environments to support agile business services. Organizations leverage CA Technologies software and SaaS solutions to accelerate innovation, transform infrastructure and secure data and identities, from the data center to the cloud. Learn more about CA Technologies at 1 The impact ranges shown above are provided to show a range of potential process improvements and ROI metrics based on previous ROI analyses conducted by CA Technologies, Inc. These ranges can be achieved through the appropriate, effective implementation and use of CA Business Service Insight. 2 IBID Copyright 2012 CA. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. This document is for your informational purposes only. CA assumes no responsibility for the accuracy or completeness of the information. To the extent permitted by applicable law, CA provides this document as is without warranty of any kind, including, without limitation, any implied warranties of merchantability, fitness for a particular purpose, or non-infringement. In no event will CA be liable for any loss or damage, direct or indirect, from the use of this document, including, without limitation, lost profits, business interruption, goodwill, or lost data, even if CA is expressly advised in advance of the possibility of such damage CS2652_0712