Service sourcing methodology
Define a structured sourcing and supplier management process!
Maturity level analysis
The maturity level analysis serves as a tool to assess the maturity of various management processes, along with a comprehensive situational analysis.
Documents to be created include:
- A detailed situation analysis, taking into consideration the current strategic partners.
- The results of the maturity level analysis involving the current strategic partners.
- An activities backlog crafted in coordination with the strategic partners.
The key questions to consider are:
- What challenges are currently most critical for the procurement organization?
- How mature is the organization in terms of procurement-related process areas?
- What actions must be taken in the short-term, medium-term, and long-term perspective?
The strategy phase is dedicated to establishing key decisions within the organization concerning IT procurement.
Documents that need to be developed include:
- An organizational strategy outlining overall goals and direction.
- A technology/IT/digital strategy detailing specific technological plans and initiatives.
- An IT sourcing strategy outlining the approach to procuring IT services.
- Other related documents, such as those detailing process management and information management strategies.
Here are some critical questions that should be asked:
- What are the core deliverables of the organization?
- What technologies does the organization aim to develop, both internally and externally?
- What is the strategy for allocating external services among various suppliers? (This refers to the service interface)
- How are information and process management structured within the organization, and how do these structures affect cooperation with suppliers?
The transaction phase involves the identification, evaluation, and engagement of one or more suppliers for specific service areas.
The necessary documents to be produced include:
- The results of market research.
- Request for information and its outcome, including potential logistics partners and other service providers for distribution.
- A detailed plan outlining the transaction process and project timeline.
- Request for quote/proposal/solution, with process selection undertaken in consultation with stakeholders.
- A compilation of stakeholder decisions.
- The finalized supplier contract along with any relevant attachments.
The following are crucial questions to address:
- What range of services does the market provide?
- Which suppliers best fit our needs?
- Can we detail the procurement process comprehensively?
- What specific services does our organization require?
- What decisions, purchases, or actions does the organization prefer to make or avoid?
- Which legal conditions are significant to the stakeholders?
The transition phase focuses on initiating the contract and commencing collaboration between the contractual parties.
The required documents to be developed include:
- An operational agreement detailing the terms of the working relationship.
- IT management process descriptions (between 3 to 15, depending on complexity).
- A comprehensive transition process description.
- A detailed plan for the transition project.
Here are some key questions that should be addressed:
- What are the agreed-upon processes at the operational level between the contracting parties?
- How will the contract partners collaborate during the service delivery?
- What kind of information exchange between the contracting parties during the transition phase?
- What are the details surrounding the transition project - the how, when, and who of the process?
The transformation phase focuses on the implementation of changes as per the contract, leading up to the successful launch and initial adjustments of all agreed-upon services.
Documents that need to be created during this phase include:
- A detailed technical transformation plan outlining the steps to be taken.
- An organizational change plan describing how the organization will evolve.
- A backlog of potential contract adjustments necessary to align with changes.
During this phase, it is crucial to address the following questions:
- What is the process for introducing, adjusting, and phasing out services?
- How does the transformation team engage colleagues indirectly involved in the transformation process?
- What adjustments to the contract could facilitate the transformation process?
The delivery phase is dedicated to the continuous delivery and enhancement of services without significant modifications to the contract or services.
The following documents need to be prepared during this phase:
- Operational IT management protocols that detail ongoing processes.
- Measures for operational improvements to enhance service delivery.
- Plans for future improvement measures, potentially requiring contractual amendments.
Throughout this phase, it's essential to address the following questions:
- What actions are implemented during the service provision?
- What operational improvements have been or could be beneficially implemented by the contract partners?
- What changes to the contract could facilitate better outcomes in future procurements?
Continuous (strategic) supplier management is employed to enhance supplier relationships at a level higher than daily operational interactions.
During this phase, the following documents should be developed:
- A comprehensive supplier management process outline.
- Protocols for strategic supplier management that guide interactions.
- Proposals for innovative services or solutions to be provided by suppliers.
To inform and refine the process, the following key questions should be addressed:
- How does the organization collaborate with its suppliers at a strategic and conceptual level?
- What evaluations, actions, and changes occur in the context of cooperation with the suppliers?
- What innovative services could the current suppliers offer to add value?
The reassessment of a supplier relationship aims to pave the way for a contract extension (if previously agreed upon) or initiate a fresh tender for the service package.
In this phase, the following documents should be generated:
- A consolidated report on supplier performance evaluation.
- An updated market research report.
- A summary of insights gleaned from innovative practices or technologies.
The process should also address the following key questions:
- How satisfied is the organization with the delivered service?
- How has the market evolved since the last market research was conducted?
- What new technologies, architectural advances, or processes have emerged since the last tender was issued?
The following timeline caters to mid-sized companies and represents an optimal scenario. With focused analysis, swift implementation, and detailed documentation, this timeline can be met. In my experience, delays are often due to stakeholder coordination, which may involve waiting, addressing concerns, handling critiques, or dealing with overbearing opinions.
- Maturity level analysis: Approximately one month
- Strategy formulation: Approximately one month
- Transaction: Approximately two months (assuming usage of standard contracts and clauses)
- Transition: Approximately two months
- Transformation: Brief, as greenfield scenarios do not necessitate significant transformations
- Provisioning: Begins in the middle or toward the end of the transformation phase
- Supplier management: Developed in parallel, with a consistent focus on enhancing process maturity
- Re-evaluation: Undertaken six to twelve months before the expiration of each contract
The formation of the IT procurement function transpires alongside the initial execution of the above-mentioned activities. This approach ensures an integrated roll-out and functional or process development rather than a step-by-step buildup followed by implementation.