Running IT-as-a-Service Part 30: Transitioning from In-House Team Management to Contract Management

Conclusion: With the migration to complex hybrid sourcing strategies, traditional IT organisations based on ‘plan/build/run’ models will not be suitable for acquiring Cloud services in an increasingly changing market. This is due to a vague understanding of service total cost of ownership and limited contract negotiation and management skills. IT organisations wishing to rely on external services must evolve to ‘plan/procure/govern’ structure to emphasise strategic service planning and hire specialised service providers’ governance skills. This shift should ensure mutual trust and respect between parties, well-defined service levels and clear roles and responsibilities. IBRS estimates the cost of the governance structure and services to be 3 %-7 % of the annual contract value. This must be considered during the business case preparation.

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