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Step 5. Augmenting Services:

Rapid changes taking place in technology add to the challenge of outsourcing, often requiring an equally swift ability to augment services. One example of service augmentation focuses on client cost management. Parties to an outsourcing agreement quickly come to appreciate that the way to minimize costs is to focus on the future drivers of today's service expense. For example, preventive maintenance can forestall problems before they occur and lead to costly downtime. Proactive user support anticipates user needs providing training sessions, improved documentation, or new help screens to effectively manage the future demand for key services. Full-service providers typically collect data on user inquiries and, in a long-term relationship, use that information to design effective programs for proactive support and preventive maintenance.

Another example of service augmentation addresses refining the overall balance and content of client projects using portfolio modification and supplementary projects. Portfolio modification provides a vehicle for anticipating and responding to rapid change by working with the client to shift the priority of certain projects in the development queue. A savvy outsourcer can assist in preparing the client to meet changing performance, competitive, or regulatory demands by modifying the portfolio in a timely manner. Supplementary projects are initiatives requested by the outsourcing client to help it protect and exploit the value of its application portfolio into the future. Typical supplementary projects tend to be larger in scope or deliverable, and rather than extend an existing application, they provide new capabilities, insights, or levels of support. Typical supplementary projects include developing an IT strategic plan, performing a review of enterprise application integration, developing and testing disaster recovery plans, and implementing major release upgrades of operating systems and enterprise resource planning packages. Clients sometimes resist simply giving an outsourcer more business, but a trusted provider can add superior value through improved business operations, leveraging the outsourcer's intimate knowledge of the client's business, its supporting information technology, and the evolving technology environment.

In approaching the augmentation of services, outsourcing providers help their clients make decisions in various ways:

  • The client may delegate to its provider the decision to accept and schedule modification requests falling under a certain cost, requesting a periodic report on decisions and sometimes providing an upper limit for total expenditures.
  • The provider may implement procedures for accepting only modification requests that exceed a certain threshold for return on investment (ROI), which the client can set and revise to control financial impacts.
  • The provider can work within the governance organization to approve and prioritize work requests as they arise.
  • The provider can expand its services to the client into business process outsourcing, and potentially reduce cost, increase flexibility, and provide superior service compared to the client's existing path and performance.

The approach chosen will depend on a combination of trust and confidence developed over the course of the relationship and consistent with the culture and operating preferences of the client.

Maintaining Trust:
Successful outsourcers need to be accomplished at creating and nurturing long-term relationships. It is been evident today that an outsourcing model performs optimally only when leaders on both sides of the agreement pool their knowledge and work together in governance sessions to develop new strategies, processes, and infrastructures. Good SLAs foster this collaboration by providing an equitable process by which either party can request or recommend changes. An outsourcer needs to go further deep in bolstering client trust by identifying in its earliest presentations to the client any potential risks and all assumptions on which the agreement is based, for example: staffing risks, anticipated user satisfaction issues, or potentially adverse reactions to recommended training intensity. In addition, he needs to take pains to clearly identify projects included and not included in the scope of the agreement, applications not covered by the base outsourcing agreement, limitations in support hours, and elements of hardware that are not the responsibility of the outsourcer. The provider should ideally strive to manage outsourcing relationships with a consistency and reliability that reinforces confidence and trust for a better tomorrow.


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