Strategic IT Outsourcing

Course details

IT in organization has evolved to become a common place these days. Firms, both private and public, managing IT needs through outsourcing has become very common as organizations try to accrue immediate benefit out of such activities. Non IT organizations consider IT initiatives to be non-core to their set of competencies and hence presume outsourcing to be the only possible strategy. However, IT Outsourcing needs to be carefully looked at from all different dimensions before such an initiative is executed. Given the scale and scope of these IT projects, it becomes very difficult for end user organizations to manage outsourcing successfully, leading to various issues that comes up during the successful project planning, execution and managing change.

With the dearth of the IT project execution and management expertise, organizations face a number of challenges such as:

• Ensuring that the solution (application, hardware and associated services such as capacity building) have been designed, developed and maintained in exact conformance to the specifications and regulations provided in the RFP.
• Maintaining the highest order of security for data, database, and application systems to ensure that no inappropriate changes are made in the solution and data is not viewed/used for unintended purposes
• Retaining the ownership and IPR of the assets procured or created during the course of the project by the service provider
• De-risking the project such that the services can continue uninterruptedly at the same performance levels even after a change in the service provider and the organization is not locked to the initial service provider.
• Given this backdrop and context of outsourcing by the end user organizations, there is a need to understand how can IT outsourcing be managed strategically, referring to the appropriate and agile frameworks and guidelines for the strategic management of IT outsourcing in these firms, such that it can be easily understood and adopted by the respective firms leading to successful execution of the aforesaid initiatives. The main objectives of this program will be to focus these issues.

Content

• Formulating frameworks, guidelines and methodologies for the complete outsourcing life cycle management IT projects which will include strategic assessment of business value, operational issues, financial and risk assessment issues.
• These will address issues like: Need Assessment, Vendor Assessment, Negotiation and contract management, Project initiation and transition and Managing outsourcing relationships, contractual terms, process descriptions etc.
• The program shall look at strategic control effectively which would mean: maximizing flexibility and control, reducing vendor search and contracting cost, cost of managing the effort and transitioning from one vendor to another, avoiding winner.s curse and leveraging on knowledge capabilities.
• Performance management . Defining what should the end users. organization measure to assess the performance of the vendors. This would point towards having the right set of metrics, guidelines towards formulation, implementation and monitoring of the Service Level Agreements (SLAs), updating the benchmarks initially agreed upon etc.
• Incentives management . Setting the right measures of performance will not be complete in itself. It will be necessary to create incentives for the parties involved to seek success of the agreement. This would mean that a closer look should be given towards rewards and penalties, other contractual clauses linked to the incentives, contractual characteristics, intangible factors affecting the incentives etc.
• Governance mechanisms. For the outsourcing mechanism to function well, the frameworks should provide for key processes like the supervision of the normal day-to-day functioning of the agreement, conflict resolution and a review of the agreement once the circumstances of the market have rendered it obsolete. This would mean that there should be periodic monitoring of performance of the agreement, updating of regular and exceptional outcomes, defining exit triggers 

Methodology

• The lead learning tool will be case studies. It will be supplemented by lectures, group presentations, group exercises and games along with self learning. To integrate the learning, the course will end with an integrated case or practical problem based group presentation.