Governance Best Practice Masterclass EquaTerra
Transcription
Governance Best Practice Masterclass EquaTerra
Governance Best Practice Masterclass EquaTerra June 2010 Research » Strategy » Transformation » Governance Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 2 Your Presenters Today Lee Ayling Tim Amatt Gerard Wijers Julian Stait John Beekman EquaTerra EquaTerra EquaTerra Milbank EquaTerra » Leads the EquaTerra » Leads the » Gerard Wijers is the » Head of the Litigation UK Technology Governance and managing director of & Arbitration practice Advisory Team Transformation EquaTerra‟s in the London office » 15 years experience Advisory activities for Governance and of Milbank in developing and EquaTerra in the UK Sourcing » Has acted for executing » 20+ years experience Management practice both suppliers and outsourcing in sourcing, for the Benelux customers in many of strategies in negotiation and region the leading technology management of » He has supported communications, » Breadth of strategy, contracts many Dutch technology and implementation and » Significant number of customers and outsourcing disputes optimisation key projects with internationals to go before the experience in both clients designing and including AD English Courts private and public implementing Nieuwsmedia, AVR, » 20 years experience sector governance solutions Belastingdienst, of handling large, CBS, ENECO, high stakes and Kluwer, Prorail, complex business Rijkswaterstaat, TNT and regulatory and Vopak. disputes Copyright © EquaTerra 2010. All rights are reserved. » John has worked at EquaTerra for three years in the role of principal consultant » He specialises in Sourcing Management and Governance issues » Roles for clients are typically interim CIO or Director of ICT, bridging the gap between business and ICT services » He has 30 years‟ experience in business IT alignment. EquaTerra Services » The Service Delivery Lifecycle is a complex journey that requires meticulous planning, solution definition and rigorous implementation control and optimization to enable full value from the arrangements. EquaTerra's methodology operates across the lifecycle. » We apply our knowledge and experience to your unique situation to define an approach that works for your organization, focused on delivering against your desired business outcomes. Copyright © EquaTerra 2010. All rights are reserved. » Service Delivery or Sourcing Strategy » Service Delivery or Sourcing Assessment » Opportunity Analysis & Business Case » Internal Improvements » Shared Services – Captive Center » Outsourcing - Offshore » InSource (back in house) » Negotiation & Contracting Governance » Service Delivery Management » Business Alignment » Software » Diagnostic and Benchmark » Renegotiation Support » Contract Review » Performance & Satisfaction Measurement » Transition » Transformation » Change Management » Project Management » Interim Management 4 Geographic Reach Advisor Specialization Outsourcing Competencies* 26% Business & Financial 20% HR 16% IT 38% Advisor Presence Asia Pacific 2% Europe 34% Americas 64% *Includes specialized competencies such as governance, financial architects, negotiators, globalization Copyright © EquaTerra 2010. All rights are reserved. 5 Representative Clients Financial Services Energy Consumer Products & Retail Life Sciences Seven of the top global financial services firms; Largest global procurement deal 70% of the competitive advisory market place Six of the top 10 global consumer products companies Over 70% of the top global pharmaceutical companies Manufacturing Public Sector Telecom, Media Entertainment, High Tech More than 20% of the competitive market place Leading independent advisor in public sector Deep process expertise Copyright © EquaTerra 2010. All rights are reserved. Transportation Three of the top five airlines 6 Governance and Sourcing Management » Leading providers of Governance solutions for Outsourced and Shared Services » Supporting all stages of the sourcing lifecycle from strategy development to transformation » Comprehensive portfolio of Governance services – advisory, interim management, outsourcing, toolkits » 30+ Governance and Sourcing Management advisors with substantial advisory experience (and extensive buy-side and service provider experience) » Dedicated Governance and Sourcing Management Practice » Advised 80+ clients in more than 100+ engagements » Supported some of world‟s largest ITO & BPO deals » Led the way in developing „Best Practice‟ » Developed unique Governance Software tool Governance Design & Build Governance HealthCheck Retained Organisation Optimisation Governance Workshops & Training Change & Communication Mgmt. Multi-provider Governance Mgmt. Sourcing Centre of Excellence Governance Maturity Assessment Demand and Supply Management EquaSiis Enterprise TM Software Copyright © EquaTerra 2010. All rights are reserved. 7 Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 8 The Importance of Effective Governance Lee Ayling, Tim Amatt June 2010 Research » Strategy » Transformation » Governance A Working Definition for Governance The structures, capabilities and processes that enable the decisions and actions needed to achieve the objectives of an organisation. Governance is needed for management of complex multi-party internal and external relationships to achieve specific goals or to ensure desired behavior. Copyright © EquaTerra 2010. All rights are reserved. 10 IT Governance » Definition IT Governance is integral part of enterprise governance and consists of leadership and organisational structures and processes to direct and control the enterprise in order to achieve the enterprise's goals by adding value while balancing risk versus return over IT and its processes.Source: IT Governance Institute (ITGI) » Proper IT Governance will focus on: – Business and IT alignment within the enterprise – Appropriate management of IT-related risks – Responsible use of IT resources – Sustained delivery of (outsourced) IT services » Therefore, IT Governance is a prerequisite for successful IT – Outsourcing Governance is part of the broader IT Governance needs Copyright © EquaTerra 2010. All rights are reserved. 11 Purpose of Outsourcing Governance Risk Mitigation Value Realisation » Meet contractual obligations » Ensure delivery of expected savings » Ensure effective management » Ensure market pricing » Rapid resolution of issues » Manage demand » Ensure management control » Create optimisation through standardisation » Provide consistent direction to provider » Leverage and focus provider capabilities » Institutionalise process improvement Outsourcing Governance must effectively balance these objectives while bringing the intent of the deal to life Copyright © EquaTerra 2010. All rights are reserved. 12 Outsourcing Governance: It Might Be Dull, But it Matters a Lot to Achieving Deal Value Loss of Outsourcing Value from Ineffective Service Provider Governance Efforts Duplicated Resources Wasted Problems Not Managed Performance Not at Expected Levels 10%–20% Value Loss Operational Challenges 20%–30% Value Loss Performance Challenges Total Potential Value Gained From the Outsourcing Relationship Copyright © EquaTerra 2010. All rights are reserved. Providers Deployed Against Conflicting Or Wrong Goal Opportunities Untapped 5%–10% Value Loss Portfolio Management Challenges “Net” Value Gained From the Outsourcing Relationship 13 Outsourcing Governance Quality and Provider Performance Quality (In general, the service provider meets the service levels as set out in the Service Level Agreement) 80% 75% 80% 72% 70% 70% 60% Price (The prices the service provider charges for its services are (still) in line with current market price) 58% 66% 70% 62% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 55% 0% Weak Average Good Excellent Weak Governance quality Good Risk (The service provider shoulders reasonable commercial risk and make necessary investments to reduce that risk) 70% 70% 59% 60% Excellent Governance quality Innovation (The service provider actively identifies innovation opportunities) 50% Average 55% 48% 50% 44% 62% 57% 60% 40% 40% 30% 30% 20% 20% 10% 10% 52% 46% 0% 0% Weak Average Good Excellent Weak Governance quality Average Good Excellent Governance quality Source: EquaTerra European ITO Service Provider Performance & Satisfaction Market Study Copyright © EquaTerra 2010. All rights are reserved. 15 juni 2010 Know and share your objectives Focus areas Goal High efficiency 1. 2. Focus on more efficient demand supply chains (leading to FTE reductions) Focus on Supply side High customer satisfaction 1. 2. Focus on improvement of service management processes Focus on improvement of incident and problem management processes Short time to market 1. 2. 3. Focus on improvement of project and change management processes Focus on improvement of operational delivery processes Focus on contract management and sourcing strategy Low complexity 1. 2. 3. Focus on improved strategic planning Focus on improvement of architecture processes Focus on improvement of service- and project portfolio management High quality 1. 2. Focus on HR processes, and organisational development Focus on quality and compliancy processes Optimised added value of IT 1. 2. Focus on service - and project portfolio processes Focus on the demand side High innovation capability 1. 2. 3. Focus on strategic planning Focus on architecture processes Focus on improvement of project management processes Copyright © EquaTerra 2010. All rights are reserved. 15 All Relationships are Not Equal Transactional Services Collaborative Services Partnership Services RELATIONSHIP CONTINUUM » Focus is on achieving cost savings and market prices » Minimal information sharing » Minimal process integration » High trust is not required for success » Goals and business strategy are shared with Providers and joint objectives developed » Providers rewarded for improving productivity and business effectiveness » Client and Provider executives are effective joint decision makers » Communications are open and flexible » Significant process integration » High trust is required for success » Business strategy is co-developed and jointly owned » Risks and rewards shared » Tangible business benefits expected » Proven history of high trust and joint success is required Outsourcing services can be viewed on a continuum: at one end are commodity transactions and at the other end fully-integrated solutions Copyright © EquaTerra 2010. All rights are reserved. 16 Outsourcing governance is supply management to external service providers The retained IT organisation = The demand-supply management organisation + internal IT delivery Retained organisation Internal delivery Internal delivery Business unit Decentral governance Central governance Business unit External delivery External delivery Decentral governance Business = demand Copyright © EquaTerra 2010. All rights are reserved. Demand - Supply management Delivery = realisation 17 Governance Today – the Challenges » Customers need to: – Understand their service and outsourcing portfolio – Prepare the organisation for change, governance and retained organisation re-alignment – Leverage experience – Improve collaboration skills and competencies – Invest more in transition and governance resources » Service Providers need to: – Demonstrate governance capabilities in complex environments – Support the collaboration framework with other providers – Level set buyer expectations on transition pain levels – Educate buyers on the level of change needed – Commit resources early to jointly developing strong governance Copyright © EquaTerra 2010. All rights are reserved. 18 Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 19 Demand and supply management in IT (Governance 2.0) Gerard Wijers June 2010 Research » Strategy » Transformation » Governance Agenda » Demand supply model » Organisational archetypes » Processes » Roles » Sizing This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 21 Best practice: Demand – Supply model Demand management Business Focus on effectiveness: doing the right things Supply management IT Delivery Focus on efficiency: doing things right Why? What? How? Who? Business processes Functionality Requirements Applications Infrastructure IT-solutions Copyright © EquaTerra 2010. All rights are reserved. Best practice: Demand – Supply management Business Demand management Supply management IT Delivery Business need What How Realisation » The business management uses IT for their daily business processes, has needs for changes and gives assignments. » The business fulfills the ownership role for IT. » Demand Management is the right hand of the business in realising it‟s information and IT needs. » Supply management is focused on the delivery of the right IT solutions and IT services. » Demand management monitors and improves the effectiveness and efficiency of business processes by initiating and implementing improvements and by making optimal use of information and applications. » Supply management coordinates the supply parties (internal and/or external) and monitors the use of company standards. Copyright © EquaTerra 2010. All rights are reserved. » IT Delivery realises and maintains IT solutions » Maintenance includes infrastructure, database and application maintenance, and operations 23 Frame of reference Retained organisation Business unit Internal delivery Decentral governance Central governance Business unit External delivery Decentral governance Business = demand Copyright © EquaTerra 2010. All rights are reserved. Demand - Supply management Delivery = realisation 24 Typical governance and organisational issues » How to balance central and decentral responsibilities? » Combine or split demand and supply management in the organisation? » How to get the real business into the drivers seat? » What is the optimal size of the demand-supply management organisation? » Which delivery to outsource? » How much application knowledge should retain internally and for which applications? » What are the right competencies? Copyright © EquaTerra 2010. All rights are reserved. 25 Example 1 CIO HR CIO Office Finance Procurement Information management HQ Information management B2C, MkB, Marketing (+BI B2C + Online) Information management Technology Information management B2B, B2B Flex, ELES, New Energy, SPM Project & portfolio management Integration office IT Supply Contract management IT operations Generic applications Infrastructure Information management Trading Copyright © EquaTerra 2010. All rights are reserved. 26 Example 2 Group IT Design IT Finance & Control CIO Office Human Resources Contract management Service IT End user support Run IT Information management Service desk Customer systems Architecture Service delivery Business systems Business requirements Other systems Run SAP SAP NL SAP TF&PS BI Projects CSIA Services SAP Process & User Integration Processautomation Desktop & office systems SAP Hosting D/S Copyright © EquaTerra 2010. All rights are reserved. IT Delivery 27 Best practice: Organisational archetypes Federal model – separation demand & supply Strong central model Business Demand management Supply management IT Delivery Business Demand management Supply management IT Delivery Central management Central demand mgt Central supply mgt Shared delivery Central management Central demand mgt Central supply mgt Shared delivery Executives CIO Office Staff directors Decentral management Central demand management organisation Central supply management organisation Decentral demand mgt Decentral supply mgt Central internal or external suppliers Central Central Executives Central Demand - Supply management organisation Decentral management Specific delivery Decentral demand mgt Decentral supply mgt Central internal or external suppliers Specific delivery Director Business management Decentral demand - supply management unit Local Suppliers Decentral Director Decentral Staff directors Business management Local suppliers Federal model – integration demand & supply Strong decentral model Business Demand management Supply management IT Delivery Central management Central demand mgt Central supply mgt Shared delivery Central Executives Staff directors Central internal or external suppliers CIO Office Decentral management Decentral demand mgt Decentral supply mgt Specific delivery Decentral Director Copyright © EquaTerra 2010. All rights are reserved. Business management Decentral demand - supply management unit Local suppliers 28 Metrics on spend demand - supply management Demand management Supply management IT Delivery 1 Broad view retained organisation Tactisch 12 - 24% Narrow view retained organisation Operationeel Strategisch Business 4 - 8% Spend on Demand mgt + Supply mgt as a % of total IT spend 3 4 24% 2 12% € 25 MiO € 75 MiO Total IT spend In the broad view of the retained organisation, between 12 -24% of total IT spend is spend on demand – supply management The contingency factor scale: In small organizations the tactical coordination of IT is relatively expensive (point 1). The optimum lies around 25 MiO; with spend above 25 MiO complexities increase, as do the demand supply mgt costs (point 2) Above 75 MiO scale advantages lead to decrease in spend on demand and supply management towards the optimum (point 3) Other contingency factors for determining the optimum scale: 1. 2. 3. 4. The investment strategy. As organisations spend more aggressively on innovation, the optimum scale will rise because governance of projects is relatively expensive The application architecture. Organisations with a lot of custom made applications have to calculate for larger demand-supply spend and a larger optimum scale than organisations with more standard packages The sourcing approach (single sourcing / multi sourcing, off shoring/ near shoring, insourcing / outsourcing) influences the optimal size in several ways The organisational set up of demand and supply mgt influences the optimal size (central, federative, decentral) Copyright © EquaTerra 2010. All rights are reserved. 29 Metrics for detailed sizing (examples – non exhaustive) Balance Demand – Supply management at STO levels Demand management Supply management Strategic 10-15% 5-10% 15 - 25% Tactical 35-45% 20-30% 55 - 75% Operational 5-10% 5-10% 10 - 20% 50 - 70% 30 - 50% 100% Balance service management Supply management Contract manager IT purchaser Contract delivery manager Service manager Service level Manager Service delivery manager Database administrator IT controller Asset manager Application engineer Sysems engineer Administrative support Service coördinator Service desk medewerker IT process manager 3 - 6% Copyright © EquaTerra 2010. All rights are reserved. IT Delivery 94 - 97% What do we do at S, T and O - level Business Demand management Supply management IT Delivery Strategy & policies Portfolio management & architecture Strategic Annual planning cycle Organization development & human resource management Security, compliancy & quality management Project portfolio management Requirements, project & change management Release, test & transition management Tactical Finance Contracts & service agreements Service level management Support Operational Operations & operational control Copyright © EquaTerra 2010. All rights are reserved. 31 What you have to do at operational level really depends on your sourcing strategy Business Demand management Supply management IT Delivery Call management Request fulfillment Support Incident management Problem management Availability management Operations & operational control Capacity management Monitoring & operations Configuration management Copyright © EquaTerra 2010. All rights are reserved. 32 Who is doing what? Demand management Business Supply management CEO Strategic planning Business director CIO Process owner Information strategy analyst Application portfolio manager IT Delivery IT director Service portfolio manager Vendor (portfolio) manager Enterprise architect Business process architect Information architect IT landscape architect Solution architect Auditor Business governance Information security officer Risk & compliance officer Security & compliance officer Quality officer Manager Management Business process Manager Demand manager Supply manager Delivery manager IT project manager Information owner Project portfolio manager Program manager Application owner Business consultant Business project manager Project sourcing manager Business process designer Information analyst Application/ infra consultant Solution designer Solution engineer Meta data manager Test manager Test coordinator Solution test manager Solution tester Change & innovation Change manager Business service manager Management control Release manager Deployment manager Contract manager IT purchaser Contract delivery manager Service manager Service level Manager Service delivery manager IT controller Asset manager Administrative support End user Operational control Key user Data administrator Functional support Data analyst Service coordinator IT process manager Application engineer Service desk agent Systems engineer Database administrator Copyright © EquaTerra 2010. All rights are reserved. 33 Who is doing what? Management control Contract manager IT purchaser Service manager Service level Manager IT controller Asset manager Administrative support Demand management Business Supply management CEO Strategic planning Business director CIO Process owner Information strategy analyst Application portfolio manager IT Delivery IT director Service portfolio manager Vendor (portfolio) manager Enterprise architect Business process architect Information architect IT landscape architect Solution architect Auditor Business governance Information security officer Risk & compliance officer Security & compliance officer Quality officer Manager Management Business process Manager Information owner Application owner Change & innovation Demand manager Project portfolio manager Supply manager Delivery manager Program manager Business consultant Business project manager Project sourcing manager Business process designer Information analyst Application/ infra consultant Solution designer Solution engineer Meta data manager Test manager Test coordinator Solution test manager Solution tester Change manager Business service manager Management control IT project manager Release manager Deployment manager Contract manager IT purchaser Contract delivery manager Service manager Service level Manager Service delivery manager IT controller Asset manager Administrative support End user Operational control Key user Functional support Data analyst Data administrator Service coordinator IT process manager Application engineer Service desk agent Systems engineer Database administrator Copyright © EquaTerra 2010. All rights are reserved. 34 Design example with roles per organization unit CIO HR Finance Procurement HQ B2C Technology B2B Trade Information management • Information manager • Application portfolio manager • Business consultant • Business process analyst • Application consultant • Functional manager • Change manager Online • Business consultant • Concept & Design consultant • Interaction designer • E-performance consultant • E-platform manager • Web content manager • Web publisher • Functional manager • Online support engineer CIO Office (no manager) • Information strategist • Information security officer • Compliancy manager • Information economics officer • Program manager Manager Project management • Project manager • Test manager • Project portfolio manager • Resource planner • Administrative support Copyright © EquaTerra 2010. All rights are reserved. Manager Essent IT Online Manager Integration Office • Enterprise architect • Information architect • Infrastructure architect • Application landscape architect • Project architect Manager Generic applications • Application consultant • Software engineer • Application portfolio manager • Functional manager Manager IT operations • Service manager • Service level manager • Problem manager • Change manager • Release manager • Asset/configuration manager • Lean belt • Quality assurance officer • Administrative support Manager Infrastructure • Infrastructure consultant • Infrastructure portfolio manager Manager Contract management • Contract manager • Administrative support 35 Thanks For Your Attention to This Introduction on EquaTerra’s Governance 2.0 Best Practices Demand management Business Supply management IT Delivery Strategy & policies 1 Spend on Demand mgt + Supply mgt as a % of total IT spend 3 Portfolio management & architecture 4 24% Strategic Annual planning cycle Organization development & human resource management Security, compliancy & quality management 2 Project portfolio management 12% Requirements, project & change management Release, test & transition management Tactical Finance Contracts & service agreements Service level management € 25 MiO € 75 MiO Support Operational Operations & operational control Total IT spend Benchmark D/S spend D/S Process Chains Process models RACI Matrices Governance Workplace Demand management Business Supply management CEO Strategic planning Business director CIO Process owner Information strategy analyst Application portfolio manager Business process architect Information architect IT Delivery IT director Service portfolio manager Vendor (portfolio) manager Enterprise architect IT landscape architect Solution architect Auditor Business governance Information security officer Risk & compliance officer Security & compliance officer Quality officer Manager Management Business process Manager Demand manager Supply manager Delivery manager Information owner Project portfolio manager Program manager Application owner Business consultant Business project manager Project sourcing manager Business process designer Information analyst Application/ infra consultant Solution designer Solution engineer Meta data manager Test manager Test coordinator Solution test manager Solution tester Change & innovation Change manager Business service manager Management control IT project manager Release manager Deployment manager Contract manager IT purchaser Contract delivery manager Service manager Service level Manager Service delivery manager IT controller Asset manager Administrative support End user Operational control Key user Functional support Data administrator Data quality analyst Service coordinator IT process manager Application engineer Service desk agent Systems engineer Database administrator Organization Structures Copyright © EquaTerra 2010. All rights are reserved. D/S roles Governance Structures 36 Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 37 Structuring Deals to Avoid Litigation Julian Stait June 2010 Research » Strategy » Transformation » Governance Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 39 BEIJING FRANKFU RT HONG KONG LONDON LOS ANG ELES MUNICH NEW YORK SINGAPORE TOKYO [Place image in picture box.] How to avoid, manage and effectively resolve IT disputes? Julian Stait 10 June 2010 WASHINGTON, DC What are large scale IT cases/trials really like? Long Document heavy Expensive Disruptive Damaging Unpredictable Very challenging: Strategy Managing expectations Patience/perseverance/stamina Stress Organisational alignment and sponsorship What are the causes and origins of IT disputes… …and why is it important to know? Sales v Procurement Other causes of IT disputes Further causes include : Requirements: clarity and certainty Poor expectation management Tensions in the delivery/ development process Complex, novel projects Poor service/performance Off contract performance Poor management/monitoring A lack of co-operation Phase 1: the procurement phase and the negotiation and execution of a contract The genesis of many major IT disputes (including Sky v EDS) Create and retain evidence relating to the bid and of pre-contractual discussions and negotiations May be admissible and assist on key issues, e.g.: (mis)representations extent of negotiations reasonableness of certain exemption clauses resolving ambiguities rectification and estoppel by convention Keep the executed contract and all amendments in a safe place! Which areas of the contract will come under particular scrutiny in any dispute? These include the following: Rights and obligations: scope and certainty Entire Agreement Variation and change control Charging and cost Liability and exemption provisions Termination and suspension Notices and service of process Dispute resolution mechanisms including escalation procedures (mandatory or optional?) Law and jurisdiction Phase 2: performance and non-performance Beware of the “bottom drawer” syndrome Ensure that all contractual "loose ends" are tied up What do you do if they are not? Note key contractual obligations and monitor performance Diary of key contractual dates Contractual variations: a major potential area of exposure… …record properly otherwise risk inevitably follows Phase 2: performance and non-performance Don‟t be frightened of acting in accordance with the contract Organisational alignment and communication are key Records of (non-) performance/complaints/responses Minutes of meetings (published or internal) Records of key conversations Implementation by the whole team of a proper document management system Internal investigations: care! Documentary evidence and disclosure What are “documents”? Why are they so important? Which documents must be disclosed? those on which you rely those which adversely affect your case or your opponent's case those which support your opponent's case Unless they are „privileged‟ Lack of appreciation of the impact of disclosure/documents The propensity of parties unnecessarily (and often inaccurately) to say damaging things… Avoidable ‘bad documents’… Examples of damaging comments made in internal documents: “The Plan and resources will be artificially manipulated to commit to deliver within the budget” “a marketing/sales ploy for the client” “To Obtain the Best Possible Price for the Purchase of an Unspecified set of Deliverables and Ensure that the Solution is Fit for [the company‟s] Purpose” “We need one of these!”… Avoidable ‘bad documents’… Examples of damaging comments made in internal documents: “The Plan and resources will be artificially manipulated to commit to deliver within the budget” “a marketing/sales ploy for the client” “To Obtain the Best Possible Price for the Purchase of an Unspecified set of Deliverables and Ensure that the Solution is Fit for [the company‟s] Purpose” “We need one of these!”… Phase 3: what should you do when it all starts to go wrong? Organisational alignment is key: documents objectives and desired outcome strategy Reluctance to involve in-house lawyers and to escalate can sometimes be misplaced Monitor key correspondence/notices Monitor/control document creation and deletion Evidence: who/what are you going to need in order to prove your case? Evidence of loss? Termination: sound alarm bells Phase 4: escalation and litigation Look after witnesses and other key players Be careful of departing employees: Documents Evidence (proof/witness statement) Ongoing co-operation Document preservation: take early steps Retain/reserve key professionals from the outset Access to systems/software: order for preservation? Strategies for the successful resolution of IT disputes Set initial goals, objectives and strategy Keep settlement strategy under review Agree lines of communication (internal and external) Build and maintain consensus within the company Team alignment (both internal and external) is key Manage internal and external stakeholders Remain focused on objectives rather than process Julian Stait [email protected] +44 20 7615 3005 Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 56 Royal Haskoning Case Study John Beekman June 2010 Research » Strategy » Transformation » Governance The impact of governance on sourcing arrangements John Beekman CIO Royal Haskoning (2008 -2009) June 10th 2010 Agenda Introduction Organisational developments Objectives 2008-2009 Governance Communication Maturity programme Questions 59 Profile Royal Haskoning Consultants, architects & engineers. 4,400 professionals. Established in 1881. Independent ownership structure. A network of knowledge, offices, partners and relations. Great diversity and synergy in extensive knowhow and expertise. Worldwide experience. 60 Royal Haskoning International 61 Agenda Introduction Organisational developments Objectives 2008-2009 Governance Communication Maturity programme Questions 62 Organisational developments (growth) Inf ra s t ruc t ure Us e rs 4.000 3.500 3.000 2.500 Deni s Wi l son VHP Cor smi t BM 2.000 Van Heugt en Dor dt se Engi neer i ng Aut onomous gr owt h User c ount l ast y ear 1.500 1.000 500 2003 2004 2005 2006 2007 2008 63 Organisational developments (increased innovation) Volume (mEur) 10,0 8,0 Projects Services Contract 6,0 4,0 2,0 0,0 03/04 04/05 05/06 06/07 07/08 64 Agenda Introduction Organisational developments Objectives 2008-2009 Governance Communication Maturity programme Questions 65 Objectives KIM Back to basics. Architecture. Governance. Sourcing strategy. 66 Back to basics Stabilise infrastructure. Improve service delivery. Application rationalisation. Improve communication. Establish clear service requirements. Maximise use of existing workplace functionality. Increase cross divisional working. Establish ICT contingency plan. 67 Architecture Design & implementation mail & calendaring infra. Design & implementation fileserver infra. Design & implementation centralized back up. Redundancy single points of failure. Implementation VOIP. Access foreign offices to RH network homelands. 68 Governance Redesign KIM organisation. IT Executive Board. IT Portfolio Board (GIS & CAD). Corporate Project Portfolio meetings. Formalised project proposals. Communication with the business. Collaboration KIM & other Corporate Groups. 69 Sourcing strategy Customer Intimacy KIM (demand). Operational excellence strategic partners (delivery). 70 Agenda Introduction Organisational developments Objectives 2008-2009 Governance Communication Maturity programme Questions 71 GAP analysis Contracted Service As documented in the contract Expected Service Centre of Excellence As captured through IT SAT & captured through interview process Delivered Service As documented in Service Reports and captured through interview process GAP 2 72 Demand and Supply in the Information chain Doing the right things Doing things right Business Demand management Supply management Delivery Business need What How Realisation » Business management uses IT for its daily business processes, for instance sales, marketing. » Business need result in IT related projects. » Demand Management (or Information Management) is the right hand of the business in realising it‟s information and IT needs. » IT Supply management is focused on the delivery of the right IT solutions and IT services. » Demand management monitors and improves the effectiveness and efficiency of business processes by initiating and implementing improvements and by making optimal use of information and applications. » IT Supply management coordinates the supply parties (internal and/or external) and monitors the use of company standards. » IT Delivery realises and maintains IT solutions » Maintenance includes infrastructure, database and application maintenance. 73 Demand and Supply in the Information chain Business Demand management Supply management Delivery Strategy & policies Portfolio management & architecture Strategic Annual planning cycle Organisation development & human resource management Security, compliancy & quality management Project portfolio management Requirements, project & change management Release, test & transition management Tactical Finance Contracts & service agreements Service level management Support Operational Operations & operational control 74 Demand and Supply in the Information chain Business Demand management Supply management Delivery Strategy & policies Portfolio management & architecture Strategic Annual planning cycle Organisation development & human resource management Security, compliancy & quality management Project portfolio management Requirements, project & change management Release, test & transition management Tactical Finance Contracts & service agreements Service level management Support Operational Operations & operational control 75 KIM domain old Demand and Supply in the Information chain Business Demand management Supply management Delivery Strategy & policies Portfolio management & architecture Strategic Annual planning cycle Organisation development & human resource management Security, compliancy & quality management Project portfolio management Requirements, project & change management Release, test & transition management Tactical Finance Contracts & service agreements Service level management Support Operational Operations & operational control KIM domain new 76 Demand and Supply in the Information chain Demand & Supply Management Division Industrial Installations Functional management Division Architecture & Building Functional management KIM Policies Compliance Workplace management Subcontractors Business applications Subcontractors Planning & Control Services Corporate Finance Corporate HRM Fixed telephone Functional management Solutions Functional management Mobile telephone 77 Agenda Introduction Organisational developments Objectives 2008-2009 Governance Communication Maturity programme Questions 78 Improvement measures IT Executive Board. IT Portfolio Board [ CAD, GIS ]. Steering committee [ CRM, Doc Mgt ]. Participation in division MT meetings. Visiting RH offices. Appointed Service Managers KIM [NL & UK]. Dedicated project reporting [to relevant stakeholders]. Newsletter [ bi-monthly ]. Activity schedule [ bi-weekly ]. 79 Agenda Introduction Organisational developments Objectives 2008-2009 Governance Communication Maturity programme Questions 80 Maturity objectives Maturity 3 Learning 2 1 Dashboard Governance Architecture Sourcing strategy Proactive Break Fix Reactive 2008 2010 2012 Time 81 Maturity objectives Maturity 3 Learning 2 1 Dashboard Governance Architecture Sourcing strategy Proactive Break Fix Reactive 2008 2010 2012 Time 82 Bottom Line Demand & Supply deserve balanced focus. Create awareness & responsibility of demand in the business. Align maturity levels in the demand – supply chain. Hire the appropriate level of competences. Keep contracts & service levels up to date. Translate business needs into ICT services. Communicate objectives and successes. 83 84 Our mission and vision Mission Creating solutions for issues relating to the sustainable interaction between people and their environment. Vision Continuously increasing the added value of our services for our clients. We consider our client‟s problems to be ours. We aim to be among the leaders in our market. 85 Organisational structure 86 86 Internal relationships (liaison role) Division director KIM director Strategic Manager Services Manager Solutions Tactical Division MT Contract & SLA manager Business consultant Tactical Demand Mgr Helpdesk Engineers Users Operational KIM DIVISION 87 Provider Provider Provider Additional Repro Printing Specific software Generic Software WAN provider WAN integrator Business applications Workplace automation KIM Realignment of contracts & processes (to-be) RH Service Integrator provider Provider provider 88 Provider Provider Provider Additional Repro Printing Specific software Generic Software WAN provider WAN integrator Business applications Workplace automation KIM Realignment of contracts & processes (as-is) SD RH SD provider Provider provider 89 Agenda » 14:30: Introduction » 14:45-15:15: Why do we need Effective Governance? » 15:15-16:00: Demand and supply management in IT (Governance 2.0) » 16:00-16:30: Break & networking » 16:30-17:00: Structuring deals to avoid litigation » 17:00-17:30: Client case study (Royal Haskoning) » 17:45-18:15: Panel & wrap up and Q&A This document is Copyright © EquaTerra 2009, and all rights are reserved. Permission is hereby granted to reproduce this document in whole or in part for non-commercial purposes, provided that EquaTerra is prominently cited as the originator and copyright holder and provided that information on how to contact EquaTerra is included. The prior written permission of EquaTerra is required to reproduce all or any part of this document, in any form whether physical or electronic, for any commercial purpose. Copyright © EquaTerra 2010. All rights are reserved. 90 Panel and Wrap Up EquaTerra and Millbank 10th June 2010 Research » Strategy » Transformation » Governance About EquaTerra Contact Us EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported over 2000 transformation and outsourcing projects across more than 60 countries. Europe/Asia Pacific +44 (0) 845 838 7500 [email protected] Supporting clients throughout the Americas, Europe, and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions. Americas +1 713 470 9812 [email protected] www.equaterra.com Copyright © EquaTerra 2010. All rights are reserved. 92