Category: Outsourcing

The homework you need to do before you outsource your IT (or sign a new agreement).

As a consultant, I get to meet a range of customers who often think they have a unique problem. Then I explain to them that actually it is quite a common problem and that a bit of homework before you started could have saved a lot of heartache.

Outsourced IT arrangements are one of these areas. Lots of organisations have them. Some have had them for a long time and are refreshing them or going to new providers. Some are well written and align closely with organisational requirements. Some have had great lawyers involved so they are legally watertight.

But very few, are well founded in the actual operational management of service. What do I mean by that? Well many of them have great ideas about service descriptions, SLAs, OLAs, performance metrics, costing models, abatement regimes, shared risk arrangements, etc. But the organisation does not yet have the data, and the mechanisms to be able to readily measure these things.

It seems like an obvious one, but many organisations outsource IT because they have not been having a great experience with it and they figure that an outsourced provider can fix it. And often they can. Just as often, if you don’t have the metrics and data properly understood before you start, you end up paying a lot more than you should. This could be because your benchmark data isn’t quite right, your asset data is incomplete, your processes are a bit different to theirs and so there is some additional work required. Or your legal definitions don’t quite line up with the ability of your reporting tools to provide data. And quite often those little gaps in information fall in the favour of the outsourced provider.  When you multiply those little gaps by a large number of assets or a large number of tickets, you pretty quickly find differences between bills and budgets that have a lot of zeros on the end.

So how do you prevent this? You do your homework up front. Yes, you get good advisors to help with the procurement process and good lawyers to negotiate the contract. You also get a good strategic technical advisor to work with you to do a detailed systems and process review before you start. This means aligning your processes, users, and assets and making sure that your data is suitable and the way you want to operate in future is properly captured into the MSA before you enter it. This doesn’t take long, but for a short piece of homework it can save you millions in MSA charges.

If you use ServiceNow and are about to embark on new IT outsourcing, or re-negotiating, and want to discuss how entrago can help you get your house in order before you start, please

If you use ServiceNow and are about to embark on new IT outsourcing, or re-negotiating, and want to discuss how entrago can help you get your house in order before you start, please contact us.

This post outlines the work you need to do before you outsource your IT, or sign a new master services agreement (MSA).

Businesses often establish a new master services agreement then work out how the underlying data should be structured in order to measure the new agreement in a meaningful way. In our course of business, we find that if the data and metrics established early on with regard for what is possible within the toolset can save a lot of time and heartache.

MSAs are not new, some organisations have had them for a long time. Some renegotiate with the same providers or go with a new one. Most go with a new provider in the hopes of getting a well-defined MSA that align closely with organisational requirements.

However, often many MSAs haven’t been well founded in the operational management of the services provided. Many of them have great ideas about service descriptions, SLAs, OLAs, performance metrics, costing models, abatement regimes, shared risk arrangements, etc. Moreover, many of these organisations don’t actually have the data, the metrics, and the mechanisms to be able to readily measure these things.

While it makes sense for organisations to outsource to drive cost savings across the board, they end up paying a lot more than they intended.  This is either because the organisation benchmark data isn’t quite right, asset data is incomplete, or processes aren’t aligned with the outsourced service provider and so there is some additional work required.  More often than not, the legal definitions don’t quite line up with the ability of the reporting tools to provide data.

These little information gaps may fall in the favor of the outsourced service provider. And when you multiply these little gaps to a large number of assets or a large number of tickets, organisations will quickly find significant differences between their budgets and bills.

Prevention is better than a hastily-signed MSA

So how can this be prevented?  It involves some homework up front and even on the advisory journey.  First, get legal representation who can negotiate your MSA requirements. It also pays well to invest in a good strategic advisor to help with the procurement process.  

A good strategic technical advisor works with you to do a systems and process health check before the start of working on the MSA.  This involves reviewing your processes, your users, metrics, and your assets and making sure that your data is suitable, and the way you want to operate in future. All of these data are properly captured into the MSA before you enter it.  This does not involve a long process, but this short piece of homework can save you millions in MSA charges.

We at entrago dive deep into the most common datasets, and what often find are incomplete or overlapping datasets.

One example of this is measuring first call resolution. The following is an example of what would need to be defined:

• the timeframe would have to be determined (e.g. within an hour of date created)
• the resolution status agreed (e.g. from new to resolved or closed)
• the ticket types (e.g. Email or phone service incidents and requests)
• a reassignment count of zero

Another major consideration is core data. Organisations have the ability to store so much data these days, and it can be used for just about every decision we make within our business.  

But is this data as useful as it can be? Core data like the following examples below are definitely useful. This is because they allow you to adjust scope and refine your non-negotiables in the MSA:

• Repeating customer data due to spelling differences (e.g. Amazon, Amazon Ltd)
• Categories which overlap (e.g. Network and Wireless)
• Locations which vary by type (e.g. Queensland, Brisbane and Fortitude Valley)
• Configuration items which have no names, duplicate names or incomplete attributes
• Poor organisation or cost structure

Do your homework well

As the great Sherlock Holmes said, one cannot make bricks without clay. Data-driven decisions will definitely help your organisation draft the MSA that will not only solve whatever enterprise ITSM issue you have, but also truly bring cost savings.

If you use ServiceNow and are about to embark on IT outsourcing, or re-negotiating your current MSA, contact us or click the button below to help you refine your data requirements and define your metrics!