Posts Tagged ‘Outsourcing’

The Real Goal of Outsourcing

October 15th, 2010

When asked why a company outsources their services, the most popular answer is cost. Simply put, it is cheaper. While that may be the case for a lot of companies that should not be your primary outsourcing focus. While cost is certainly a priority, your business should be looking for capability augmentation. You want a supplier who’s going to give you superior capabilities of a variable capacity. Sumeet Sanghani, Sr. Vice President of Outsourcing at SunTrust Bank gave a presentation about “Global Outsourcing” back in July at an IMF Forum. During that presentation, he gave several examples of capability augmentation at SunTrust. He spoke about the bank transitioning from FT based deals to outcome based deals and the outsourcing team’s creation of a knowledge services center of excellence. Mr. Sanghani sees these knowledge services centers as the future of outsourcing.

According to Sanghani though, there is an inherent bias against outsourcing, particularly given what is happening in the marketplace now and also the political sensitivity. Many companies prefer “easy” outsourcing. For example, “go get me the 40%, get it done in 6 months, and declare victory.” The perception here is that you do not want to overcomplicate governance because the company has enough things to do already.

If you would like to read the IMF report on Mr. Sanghani’s outsourcing presentation, entitled “Global Outsourcing at SunTrust,” please visit the Reports Section on the IMF website.

Join Us in July!

May 28th, 2010

IMF will be holding its annual Project Management and Outsourcing Forum July 13th and 14th.  It will be hosted by SunTrust at its Conference Center in Atlanta. 
Presentations scheduled for the Forum are listed below.   We hope you can join us!

Best Practices in Negotiating Outsourcing Agreements
The goal of every outsourcing agreement is to ensure an organization receives high quality service at low cost.  Achieving this goal can be a rigorous, time-consuming process.  Carefully weighing risks such as hidden costs, complexity, confidentiality - to name a few - is essential to a successful negotiation.  In this presentation, Chubb & Son will discuss best practices they have successfully implemented to develop and maintain beneficial outsourcing agreements, resulting in high quality at reduced cost.
Presented by:  Chubb & Son

Building a PMO at FHLB of Atlanta
In response to the need for better project management of two of the largest projects ever undertaken at FHLB Atlanta, the bank decided to build a Project Management Office.  Their goal in doing so was to improve processes and build their bottom line by giving these and other projects an improved chance of success.  In this presentation, Tracy Bleam, PMO Director of FHLB Atlanta, will discuss key steps taken in development, benefits received, and how this endeavor contributed to the success of both projects.
Presented by:  Tracy Bleam, PMO Director, FHLB of Atlanta

Current Trends in the Outsourcing Marketplace
With further commoditization of IT infrastructure services and the entry of new cloud and Infrastructure as a Service (IAAS) providers, companies have a number of options available to deliver IT.  This discussion will focus on the relative impact of various delivery models that IMF has observed in benchmarking studies in recent months.
Presented by:  Caleb Masland, Managing Director, The Information Management Forum

Global Outsourcing at SunTrust
In this presentation, Sumeet Sanghani, SVP of Global Outsourcing at SunTrust Bank, will share SunTrust’s success and the key strategic steps it took to avoid many of the difficulties other financial institutions have faced during this economic downturn. He will also discuss his experience in managing Global Outsourcing at SunTrust, including the changing nature of outsourcing and the challenges and guiding principles of a successful outsourcing strategy.
Presented by:  Sumeet Sanghani, Senior Vice President, Global Outsourcing

Project Prioritization in a Dynamic Environment
In this presentation, American Red Cross will discuss how they leverage project portfolio principles to ensure the right projects are selected and the desired results are achieved within the scheduled timeframe and planned budget, in an extremely dynamic environment.
Presented by:  American Red Cross

Project Managing Integration of Choicepoint into LexisNexis
Over the past three years, project management at LexisNexis has played a key role in the integration of Choicepoint into LexisNexis.  From migrating to new platforms, sun-setting technologies, to bringing DR in-house, the last few years have been significantly challenging.  In this presentation, LexisNexis will walk through key milestone migrations and how Project Management has assisted in transition management. 
Presented by:  LexisNexis

On the Importance IT Outsourcing Measurement

May 25th, 2010

We only need to read press releases to see that most new IT outsourcing agreements are incredible deals for both the client and the vendor. They are marvelous examples of synergy with significant cost advantages that allow the client to focus on their core competencies. Why then do some deals go for years with satisfied clients and others hit the wall after about three years?

Of course there are a number of reasons that any one deal goes from a great strategic victory to something less. In most cases though, we have seen there are two common culprits:  ARC and COLA.  The ARC (Additional Resource Charges) and COLA (Cost of Living Allowances) very often increase the cost of the agreement, wiping out any savings gained by economies of scale.

Most current outsourcing agreements allow for some form of price renegotiation and it is our experience that the clients who exercise these options generally are far more satisfied in their arrangement than those who do not. By adjusting vendor price to reflect the current market in an ever reducing IT unit cost market, a client can stay competitive in an agreement long term.  Certainly this reduces volatility and allows clients to stay focused on core competencies, which is why many clients outsource in the first place.

To hear more on this topic please join us at our Forum on outsourcing in July at the Project Management and Outsourcing Forum.