A global Fortune 500 client was having significant performance issues with their off-shore partner. They are heavily outsourced across Infrastructure & Operations, software engineering and maintenance. In the middle of a five year deal both parties had reasons to want the deal to be successful - the question was how to turn it around and ensure it doesn’t go sideways again.

The Strategic Aspects of the Deal

This deal as is the majority of the deals I work on was based on the principles of Vested Outsourcing, commonly known as “Outcomes Based” sourcing. To turn around this deal we had to first understand the strategic aspects of the agreement as defined between the parties. After which, we had to ensure that; all parties understand the strategy, know the primary levers for success, have a continued commitment to and focused on the outcomes that are necessary for success — this means the success of both parties. Through a series of interviews, staffing analysis, artifact reviews, ticket analysis, surveys, and analysis of the contract and the amendments, led to the determination that this arrangement had devolved into “your mess for less”.

Leadership of both companies were committed to the outcomes originally contracted for, so a remediation program was put into place to shore up strategic components of the partnership, these included:

• OCM/Training - the key to success in any large corporate endeavor is organizational change management. At Capto we have a robust OCM practice and make it an integral part or our deal roll outs. It is important not to forget OCM is not a one and done; it needs to be reinforced day after day.

• Communications and Marketing program - It is all too common for internal departments such as Information Technology (IT) to forget marketing and communications is a critical skill to have. Communications and marketing go hand in hand with OCM.

• Staff upgrades - We need to do a lot of training and in many cases staff replacements.

In addition to the strategic components above we had to understand each and every obligation to figure out what was and wasn’t being done and how bad of a situation do we have.

How Bad is it?

This deal was envisioned and purchased as an outcomes based arrangement but it devolved into “your mess for less”. Very few of the outcomes that were contracted for were being delivered and BAU (business as usual) work also suffered as contractual obligations were not being me. In short, the situation was very bad.

We performed a deep dive contract analysis, extracting thousands of obligations from contract documents and developing a methodology to determine if those obligations were being met and if they are not being met then, developing a plan to see that they are met with all changes being integrated back into BAU. We wrote a set of bots using Python, Pandas, docx2python, and MySQL to ensure that all obligations were extracted so a deeper analysis could take place.

Obligations were bundled into logical groupings so teams could perform the analysis on each one to determine if the obligation is being met and if it is not met a plan developed to close any gaps.

Making Sure it Stays Fixed

We had to make sure that once all obligations were being met that the vendor stayed in compliance with the contract and the client managed to the obligations that have been agreed to between the parties. The Python bots that we created in the analysis phase were useful in loading the obligations into a contract management system (Icertis) which will be used by both parties to manage obligations, review responsible areas, approve evidence of compliance, and schedule audits.

Outsourcing your IT area is not a fire and forget process, to be successful you have to actively manage the agreement and work to make both parties successful.