Outsourcing Partnership

1. Outsourcing Partnership Shared Perspectives

2. Introduction • This is a presentation based around an outsourcing project I have participated in within the last year. • This isn’t a sales pitch for a vendor. • This IS a talk about the challenges I have faced from inception through to the day to day running of the relationship. • This will be useful for anyone who is about embark on their own outsourcing/ relationship journey

3. Outsourcing? Partnership? What are you looking for • How much appetite/ capability do you possess for managing a day to day relationship?

4. Why are we doing it • Remove constraints on skill and FTE demand requirements to address additional testing areas (e.g. non functional testing) • Gain a greater and more efficient access to tooling and automation • Gain greater and more efficient access to test consulting • Allow internal capability to focus on the Intellectual Property (IP) of running the NFUM core business and move their contribution up the value chain • To provide flexibility to address variable demand across a number of testing phases/requirements for additional testing areas • Achieve long term cost efficiencies for additional testing areas

5. What are we doing • Assess • Tangible and measurable results of alternative approaches • Robustness and flexibility to stand the test of time • Measure • Performance of the testing model using KPIs (e.g. productivity, quality, timeliness, reporting, Others – downtime, support effectiveness, effectiveness of knowledge management, etc) • Ability to meet common or specific business need • Validate • Phased approach driven by maturity levels to minimize risk and disruption, but significant enough to deliver benefit (i.e. not a body shopping exercise)

6. How are we going to do it • Using all the work done to date formalise the activities to achieve an informed and tangible closure • Create a simple capability assessment document, this should also include details of POCs dates and potential size etc • Identify a specialist suppliers that could work in partnership to help develop the best strategy moving forward. • Use existing capability statements to help develop the understanding of viable models and help formulate an initial strategy • Formalise engagement with these specialist suppliers, and in collobration allow them to demonstrate their tangible capabilities evidenced by maturity in the models by using real life examples (in the insurance space) • An implementation plan for formalised POC(s) with a selected supplier • Verify the selection based on results of the POC(s)

7. Our Journey • The selection process • Qualifying your selection • Living the relationship.

8. The Selection Process • A simple scoring matrix to gain hard and tangible results • A simple commercial assessment model to compare one partner with another etc. • Evaluation criteria should be developed prior to engagement to ensure honest and independent evaluation of partners • Set common challenges for suppliers to overcome via the capability statement, which can then be used for tangible evaluation • Suggestions of common challenges faced elsewhere.

9. Oct 08 Oct 15 Oct 22 Oct 29 Nov 05 Nov 12 Nov 19 Nov 26 Dec 03 Dec 10 Dec 17 Dec 24 Status Selection Timeline 2007 Overall Governance Activity Initiation • Kick-off Meeting 25/10/07 • Detailed POCs Plans Capability Statement Supplier Assessments • Stakeholder Engagement • Selected Supplier & POCs Supplier NDAs Start to issue Supplier H/L Capabilities Team Supplier Meetings Relevant Client Case Studies Team Client References Pipeline Demand • Identify Relevant Clients 29/11/07 • Checkpoint Go/No Go 21/12/07 Current and Future Business Risk Profiling Identify POCs Set Customer/Demand Makers Expectations Collate Commercial Information Detailed Service Descriptions LOI/Heads of Terms Establish Contractual & Commercial Framework Communication

10. Request For Process (RFP) • Project Scope • Procedure • Benefit Realisation • Supplier History & Capability • Requirements • Relationship • Commercial Considerations • Exit Strategy • Contractual Requirements • Add Value And Innovation • Format And Presentation Of Responses • Audit And Control

11. RFP From The Vendors Perspective • Understanding the needs of the Client • Technology • Domain • Testing requirements • Value addition • Relevant prior experience • Key personnel • Key differentiators that the client can take away

12. Proof Of Concept (POC) • Objective • Outcome • Scope • Background Information • Methodology • Timelines • Metrics • SLAs • Success Criteria

13. POC – Vendors Perspective • First impression is the best impression • Delivery • On Schedule • On Budget • To the required standards/ quality • Showcase • Understanding • Talent • Experience • Knowledge • Go beyond stated client needs

14. POC Scoring Matrix

15. Governance • Effective framework to manage the relationship • Key personnel • Escalation mechanisms • Conflict resolutions • Identifying key metrics • Account review mechanisms • Reporting mechanism • Change management

16. Governance – Vendors Perspective • Onsite Account Manager • Receiving all sourcing requirements from NFUM • Coordinating to get the right fit resources • Coordinating with NFUM Group IT Testing team to seek clarity on exact skill requirements, etc. and organize any interview that needs to be done • Ensuring agreed SLAs are met for resourcing • Relationship management • owns the business case • Program management • Drives the vision and strategic intent to a project level • Project Management • ensuring the management of project delivery on everyday basis • Operational management • ensuring the technical and quality compliance during delivery of the project • key principles • Transparency at all levels and forums • Periodic checkpoints, timely escalation and quick decision making

17. Living The Relationship • Procedures • Ensuring that you have your own procedures documented • Ensuring the procedures are explained and understood PRIOR to a piece of work starting. • The vendors needs to know of any unique conditions of employment. • SLAs • Agreeing the terms of the SLA • Which of the SLAs will have the biggest impact on the business • Which of the SLAs will you deal with most commonly? • Have the SLAs been communicated to all the major stakeholders?

18. Living The Relationship • Integrating the teams • Moving away from us and them • Team building • Going as far as MT staff managing NFUM staff • Knowledge retention/transfer • Between MT and NFUM • Between MT staff • Moving up the value chain and away from pure  staff augmentation • Moving beyond Testing Service

19. Living The Relationship • Issue Resolution • Timely raising of issues • Willingness to work together • Confidence Building • Metrics • Reviewing of work • Impact on other relationships (e.g. contractors/agencies) • Communicating potential change to other parties

20. Living The Relationship • Management overhead • The need for a relationship owner to deal with day to day issues • Escalation points • Juggling business as usual with vendor management • Management liberation • The ability to hand over a piece of work with confidence. • Governance • Ensuring you follow the disciplines set down in the governance documents. • Being able to work to the spirit of the document rather than relying on it to resolve issues.

21. Living The Relationship • Moving offshore • Staff may worry about their jobs • Connectivity Issues • Ensuring communication procedures are in place. • Quality reviews • Metrics • Reporting structure agreed.

22. Living the relationship - measurement

23. The Vendors Perspective

24. Key Objectives To Takeaway • Honest addressing of both teams questions will give you a far more productive environment • Agreeing which metrics both companies use ensures expectations are understood and agreed, and it allows you to implement SLAs. • Communication is the key to any engagement. By initially having some tough talking it allows both sides to work within agreed parameters.

25. Questions ?