Outsourcing: How to Create a Transformation Roadmap
If you don't know where you want to go, as the Cheshire cat once advised Alice in Wonderland, any road will take you there. But if you have specific and significant goals for your outsourcing engagement, you need a map to make sure you arrive at the intended destination.
Thu, July 23, 2009
CIO — Most information technology leaders enter into outsourcing relationships with a reasonable understanding of where they'd like their IT services provider to take them—some point in the future where the state of IT has been improved by saving money, increasing efficiency, or implementing new enterprise systems.
But do they have a clear idea of how they'll actually get there? Not so much.
The problem with that strategy is that it's akin to heading off on a road trip to a great new destination without a map or directions, says Shawn Fields, a managing consultant with outsourcing advisory firm Alsbridge. And it will likely leave you feeling the same way—lost and frustrated.
Outsourcing clients need to specify not only where they are going —We want a cost reduction of 20 percent over five years, for example—but also how they're going to get there. One way to do that is to create a transformation roadmap: a definitive plan specifying how the vendor will provide those contractually obligated improvements.
"It's easy for a provider to say that they're going to reduce contract spend 20 percent over five years, but where the rubber meets the road is when the client asks, 'How?'" says Fields. "That extra due diligence—the 'how'—provides the mechanism for the client to verify that the committed cost improvements are or are not achievable."
A transformation roadmap should consist of a set of projects prioritized by their importance as well as the timing of their implementation, Fields advises.
Each transitional project in the overall transformation should include a specific set of information. For example, if the overall transformation roadmap calls for overhauling an organization's help desk, one transitional project might be changing the password-reset process, which would look something like this:
A brief description of the project (The introduction of automated password-reset tool)
Intended scope of the project (An IT Help Desk)
A non-binding estimate of what the anticipated investment will be and who is responsible for making the investment (Projected implementation cost of password-reset system is $300,000. Cost will be shared by client and provider.)
Anticipated benefit of implementing project—typically expressed in terms of ROI or productivity (Implementation of the password-reset tool will reduce password calls to the Help Desk by 50 percent annually. At 50,000 password-reset calls annually and $20 per call, anticipated annual cost savings is $625,000. ROI achieved in approximately six months.)
Anticipated impact to the end-user community (Average hold times at Help Desk today are 45 seconds. Users will benefit by being able to reset their passwords at their convenience with no hold time, with a corresponding increase in customer satisfaction.)