New model of IT outsourcing

Feature image
  • Company: BipDate: 2011-2013Sector: Energy
  • Customer: <Confidential>Function: Information systems
  • Type of project: IT management & governance; Strategy; Outsourcing; Process reengineering
  • My role: Project sale and execution responsible

The customer, a big energy utility with most of its IT activities outsourced to a single provider for several years, wished to redefine its outsourcing model with the following objectives:

  • Identifying activities that could be redesigned using best practices
  • Critically assessing the existing outsourcing model, specially in those areas where more problems had arisen in the last years
  • Introducing competence in service provision (for some selected services), to avoid the negative effects of a single provider provision
  • Defining the evolution of the IT model (functions to be outsourced or internalized), focusing on the effective control of services, and thus adjusting the organization
  • Obtaining higher service levels, increasing the control over the services and reducing their provision costs

During the first part of the project the following activities were carried out:

  • Analysis of the existing services and outsourcing contract situation (AS-IS analysis of the outsourcing model and DAFO analysis)
  • Definition and analysis of alternative evolution scenarios and the corresponding IT governance model
  • Sizing for the proposed service model

In a later stage of the project the proposed model was implemented by:

  • Detailed definition of the new operating and outsourcing model (including a new process model)
  • Creating a RFP to select new outsourcing providers; proposal evaluation and provider selection
  • Definition of service outsourcing contracts with the chosen providers
  • Creation of a new relation model with the internal customers of the IT function
  • Identification and definition of new activities for providers coordination

Currently there is still work going on in this project:

  • Supporting the effective collaboration among the different providers of outsourced IT services
  • Controlling the provision of IT services by the providers, and generating service management reports
  • Preparing reports on IT services provision for internal customers
  • Working on the continuous improvement of the IT outsourcing model
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