Rand Mutual Assurance (RMA), a non-profit mutual assurance company, originally outsourced all their IT requirements in 1995 contracting a single service provider for a four-year period. The contract included the development of software applications, the supporting infrastructure and maintenance.
At the end of the contract period Peter Watkins, Manager, Management Information Systems and Administration at RMA was faced with the decision to either continue with the existing single service provider or to move to a multi-vendor service environment.
A professional current state analysis with a diagnostic evaluation was carried out, which provided RMA with precise decision-making information. RMA subsequently engaged the services of outsourcing management consultants, Outsource Decisions and Management Services (OD & MS) to assist with the termination of the existing contract and the selection and engagement of new service providers
"It is a well-researched fact that the majority of outsourcing deals become unsatisfactory to one of the partners involved within the first few years of the agreement," says Jan van der Zandt, COO of OD&MS. "This dissatisfaction generally stems from poorly delivered services or the customer`s perception that they are not getting the promised value for the price being paid. For whatever reason, the fact remains that all outsourcing deals invariably require a degree of remediation or renegotiation at some point during their lifetime.
"When RMA approached us to assist them in reviewing their existing outsourcing agreement, we conducted a situation analysis using our methodology called SourceIT. The results indicated that the existing outsourcing contract could not be satisfactorily remediated, and that it would be in the best interests of both parties to terminate the agreement," says van der Zandt.
The first step in the termination process was to put the existing service provider on notice and to draw up an Exit Management Agreement. Once implemented RMA was able to exit from the existing contract over a period of three months, amicably, and without any cost to RMA.
Part of the consulting services provided by OD&MS was to assist RMA in clearly defining their service requirements and to indicate the service levels which RMA required these services be delivered. Based on this service definition RMA, together with OD&MS identified two specialist service providers. One to stabilise, support and manage the software application and development environment and the other to manage and support the hardware and networking infrastructure.
The contract process drew extensively on OD&MS` SourceIT methodology and the contracts incorporated a comprehensive set of Service Level Agreements (SLAs) which detail the performance requirements of the service providers and provide RMA with clear business metrics against which to measure the service providers` performance on a regular basis.
The total replacement project took four months, and OD&MS continues to be involved in the implementation and management of the maintenance of the outsourcing agreements.
"Without the services of OD&MS, we would have found it very difficult to move ahead as quickly as we did. Their knowledge of the industry is exceptional and their professionalism and quality of negotiation and project management cannot be matched," concludes Watkins.
Share