Terry Dargan

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Conclusion: At IBRS, we often find that the performance of IT Managers is weighed too heavily on short-term criteria. In such environments when outsourcing is being considered, the pressure to minimise current costs and to be seen to take quick, decisive action can result in on-going problems and higher than anticipated costs. There are, however a number of strategies that organisations can adopt which will lead to significantly better outsourcing outcomes.


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Conclusion:An often reported issue with our clients is that they find the process of benchmarking costly and time consuming, while rarely does it provide them with worthwhile information. After discussions with those involved we have found that this dissatisfaction is often due to a small number of issues which could have been resolved prior to undertaking the benchmarking process.


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Conclusion: The phase of the outsourcing lifecycle that involves the selection of the service provider is where the buying organisation has the opportunity to make a decision that can make or break the outsourcing initiative. A considered approach that includes an analysis of both the buying organisation requirements and potential service providers' capabilities is the most likely way to achieve a successful outsourcing outcome.


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Conclusion:All contracts eventually terminate, however the reasons for the termination and the way the termination is handled can lead to different outcomes. To minimise the risks associated with contract termination it is essential that the buying organisation gives due consideration to this event while in the early stages of the procurement cycle. Unless the procurement contract is drafted to cover the issues that can arise as a result of termination, the buying organisation can be faced with significant business disruption, financial penalties and potentially even legal action.


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Conclusion: One of the key activities in Contract Management is the governance and performance management process that is used to ensure that suppliers meet their contracted deliverables.1 Despite the importance of this process to the achievement of the goals surrounding the contract, in many situations contract managers report that the performance targets and related governance processes have not worked, and in some cases, actually hindered contract performance.


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Conclusion:Despite the importance of the contract in the procurement process some IT organisations continue to delegate full responsibility for contract preparation to their legal group or to external legal advisors. This can result in an overly legalistic document which may also fail to adequately address the non legal requirements that a buying organisation also needs in the contract.


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Particularly during the tough economic times, we find that the performance of CIOs can often be weighed too heavily on short-term criteria at the expense of strategic long term goals. In such environments when outsourcing is being considered, the pressure to minimise current costs and to be seen to take quick, decisive action can lead to significant longer-term problems.

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Conclusion: Many organisations have found that as the level of risk increases in their contracts, the potential benefits that can be achieved from enhanced contract management also increases. A process that involves risk identification and the quantification of the probability of these risks occurring can help guide organisations in determining the approach that they should take to the management of their contracts.


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Conclusion: Contract management is the longest activity in the procurement lifecycle. As an example, this activity may run for well over five years with an outsourcing contract. The potential for this activity to have a major impact on contract outcomes means that buying organisations must ensure that they apply an optimum mix of resources and executive overview to this activity.


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Conclusion: Outsourcing IT can involve significant ongoing expenditure for buying organisations. A systematic approach to this activity with the right level of senior management involvement is the best way to achieve your outsourcing goals.


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Conclusion: All organisations are involved, at one time or another, in procurement. This is either through the sourcing of goods and services, or the supply of their products and/or services to buying organisations. Despite the importance of procurement many managers in IT do not fully understand the process and as a result do not take advantage of the opportunities that a well- planned procurement project can deliver.


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Conclusion:The transitioning of work being outsourced from client to service provider is the highest risk part of any outsourcing deal. If problems arise in the transition there can be serious consequences to the client organisation's business activities, especially in situations where the availability of IT systems is critical to business operations.

Despite this many clients organisations take a "hands off" approach to the transition, as in their view it is a service provider responsibility. The client executive must not abdicate responsibility and instead must take an active role in overseeing the transition.


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Conclusion: Project managers often find management of the change process one of the hardest aspects to deal with in their projects. While they have been trained to deal with facts and figures using templates and other project management aids, rarely do they have the necessary skills and experience to successfully manage the workplace change associated with their projects.


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Conclusion: Many organisations overcomplicate their desktop RFPs with technical jargon while underplaying some of the key operational and commercial considerations associated with their desktop procurement process. The end result can be a contract that while providing a desktop that meets the organisations technical needs, falls down in commercial areas such as competitive pricing over the contract life.


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