Managed Services Balanced Scorecard Presentation By Sourcing Gurus
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The document outlines the challenges organizations face in effectively overseeing outsourcing and managed services due to overwhelming data from vendors and a lack of governance, which often results in subjective and adversarial relationships. It introduces the balanced scorecard approach as a structured framework for measuring the value of managed services across financial, delivery, customer satisfaction, and resource productivity metrics. This approach facilitates clearer communication of relationship health and offers benefits such as time savings and improved reporting for both clients and service providers.
Managed Services Balanced Scorecard Presentation By Sourcing Gurus
- 1. Managed Services / Relationship Balanced Scorecard 1 www.SourcingGurus.com © 2010 Systems Plus Proprietary and Confidential
- 2. Speakers Mike Wind Director, IT with Collective Brands Inc (was earlier Director, IT Applications from 2007) Director, Consulting Services at Hackett Group for 2 years Director, IT at Michaels Stores, Inc for 3 years Florida State University Ratish Pandya MS from Penn State University, PMP Certified professional with 10+yrs or IT experience 3.5+ years experience in leading Sourcing engagements. Focus area includes End to end Vendor selection (ADM/BPO) Transition governance Governance setup & sustain (VMO/PMO) Functional expert on VMO and Balanced Score Card Kapil Sanghi B.Com, M.E.P. from IIM (A), 10 years work experience in software industry Specializes in leading BPO engagements Functional expert on VMO and Balanced Score Card 2 © 2010 Systems Plus Proprietary and Confidential
- 3. Systems Plus Solutions – Background 20 years of transforming global enterprises using Technology Experience in 20+ countries, multi-lingual, multi time zone environment Team of 300+ resources and growing ISO Certified Processes (ISO 9001:2008) Key practice areas: Sourcing Advisory (services rendered under “Sourcing Gurus” brand) Technology Solutions Oracle E-Business Oracle E- Business Sourcing Advisory Support & Helpdesk 24/7 Technology Helpdesk & Solutions Support 3 © 2010 Systems Plus Proprietary and Confidential
- 4. Client - Collective Brands Inc Collective Brands, Inc. is a leader in bringing compelling lifestyle, fashion Revenue and performance brands for footwear and related accessories to consumers worldwide. Data for 2008 $ 3.4 Bn Collective Brands is the operating company for Payless ShoeSource, No of Stores Stride Rite Corporation and Collective Licensing International 4,877 Collective Brands Inc. now ranks as the largest non-athletic footwear company in the Western Hemisphere 4 © 2010 Systems Plus Proprietary and Confidential
- 5. Overseeing Managed Services: Challenge Challenge: “Organizations are strained to ‘Effectively Oversee Outsourcing and Managed Services’”* Data and metrics provided by vendors is: Overwhelming Provides little structure and/or relationship to the organization’s goals and objectives Only generally focuses on the delivery status Lack of performance or ineffectiveness is difficult to diagnose Relationship governance is always underestimated and tends to be an afterthought Lack of governance makes vendor relationships subjective and adversarial * 2008 Black Book of Outsourcing – State of Industry Report 5 © 2010 Systems Plus Proprietary and Confidential
- 6. Overseeing Managed Services: Solution Solution: The Balanced Scorecard approach measures and articulates the value of Managed Services A framework encompassing all the elements of the relationship Financial, Delivery, Customer Satisfaction, and Resource Productivity A clear line of sight between objectives and the critical Managed Services delivery items A tool for communicating status and results A quantitative and qualitative view of the relationship health 6 © 2010 Systems Plus Proprietary and Confidential
- 7. The Balanced Scorecard for Managed Services A framework encompassing all elements of the relationship Standard Balanced Managed Services Scorecard Themes Balanced Scorecard Financial Perspective “If we succeed, how •Profitability will we look to our shareholders?” •Price •Shareholder Value Customer Perspective “To achieve our •Service vision, what customer needs must we •Quality serve?” Internal Perspective “To satisfy our customers and •Cycle Time shareholders, at •Productivity which business processes must we •Cost excel?” Learning and Growth “To excel in our •New Skills processes, what must •Continuous our organization learn?” Improvement •Intellectual Assets 7 © 2010 Systems Plus Proprietary and Confidential
- 8. The Balanced Scorecard for Managed Services A clear line of sight between objectives and Managed Services delivery The Scorecard is a drill down from Themes to Objectives to Metrics The Themes will comprise of the applicable Objectives The Objectives will comprise of the applicable Metrics 8 © 2010 Systems Plus Proprietary and Confidential
- 9. The Balanced Scorecard for Managed Services A tool for communicating status and results The Measures will comprise of the applicable Metrics 9 © 2010 Systems Plus Proprietary and Confidential
- 10. The Balanced Scorecard for Managed Services A quantitative and qualitative view of the relationship health The tool provides ability to add comments and analysis at each step 10 © 2010 Systems Plus Proprietary and Confidential
- 11. The Balanced Scorecard for Managed Services A quantitative and qualitative view of the relationship health The tool provides ability to add comments and analysis at each step 11 © 2010 Systems Plus Proprietary and Confidential
- 12. Value of the Managed Services Scorecard Value for the Client: Consistent method of reporting for all providers A historical record, in a database, for you and your team to access A central repository for your team to input analysis at every Measures that are agreed upon with emphasis on the appropriate metrics Providers don’t offer reporting to capture other areas The ability to measure without significant increase in internal costs (Potential) Value for the provider Makes the governance less subjective The opportunity to evaluate the maturity of the client’s internal processes Mechanism to report the data / status of their services 12 © 2010 Systems Plus Proprietary and Confidential
- 13. Benefits of the Managed Services Scorecard Return examples for the Client: The client and provider can save on investing in governance effort: Time savings on monthly governance…soft As much as 50% reduction in time spend on governance material preparation Time re-focused on relationship management and driving value from the model Measuring the relationship will provide hard savings re-investment opportunities: Value-add services from the provider…hard Services performed to evaluate initiatives in the strategic portfolio Services performed to maximize productivity and increase performance of the systems Maximizing On/Off-Shore Ratio, Blended-Rate…hard Improvements in contract types…hard Maximize the amount of capacity and services in a multi-year core contract Minimize the amount of Capacity Leakage / non-utilized hours in a hours-based contract 13 © 2010 Systems Plus Proprietary and Confidential
- 14. The Balanced Scorecard for Managed Services Software-as-a-Service (Saas) Offering Sharepoint / .Net tool Hosted site with client domain (“sourcinggurus.<clientname>.com”) Includes pre-linked Themes, Objectives, Measures Includes resources to load data at regular / defined rhythms Includes a yearly setup (weights, tolerances, and objectives) Additional Offerings / Services Resource time for metric analysis More frequent updates of weights, tolerances, and objectives (quarterly, semi-annually) Additional “tracking” metrics and linked metrics Process maturity analysis based on ITIL 14 © 2010 Systems Plus Proprietary and Confidential
- 15. Appendix 15 www.SourcingGurus.com © 2010 Systems Plus Proprietary and Confidential
- 16. Appendix - What Comprises Scorecard Categorized Into Organization’s Goals Themes • Aggregate Spending Financial • Targeted Spending Impact • Return on Investment • Qualitative Measure Gives Visibility Client & Relationship • Quantitative Measure Stated and Management • Governance Weighted As To • Project Delivery Solution • Estimating / Managing Performance • Innovation • Availability Service • Response Time Performance • Business Continuance • Skill Alignment Resource & Talent • Resource Quality Management • Team Development Comprised Of Measures Objectives • Manage Spend on Services and initiatives to Budget Targets Financial • Optimize Spend for Specific Technology Areas Impact Outcomes • Return/Benefit Impact of Investments(e.g. savings on internal headcount) Client & • Manage Customer Relationship (summary of qualitative measures) Relationship • Drive quality of the Service Offering (summary of qualitative measures) Management • Grow the Maturity of the Offerings and Relationship through Governance • Manage Initiative Delivery to Milestone and Scope Targets Solution • Deliver projects within estimated Capacity Performance • Use Competency Center to Drive Innovation Drivers • Manage System Availability and Performance (Up-Time Rate) Service • Manage Resolution quality and Response (Mean Time to Resolve) Performance • Reduce negative Business Impact/Increase Continuance (% attained) • Align Skills and Portfolio to Business Needs Resource & Talent • Drive quality of the Offering and Resources Management • Increase Customer Business Knowledge of Team 16 © 2010 Systems Plus Proprietary and Confidential
- 17. Appendix - Setting Up the Scorecard Categorized Into 1. Goals of the CIO 2. Themes Gives Visibility Stated and To Weighted As Comprised Of Measures Objectives 1. Goals of the CIO 2. Themes CIO (IT) Objectives • Aggregate Spending Financial • Targeted Spending The CIO’s Impact • Return on Investment Corporate Objectives can be Categorize Client & • Qualitative Measure utilized Relationship • Quantitative Measure Management • Governance (and/or) Solution • Project Delivery • Estimating / Managing Performance • Innovation Survey Answers • Availability A series of Service • Response Time Performance interviews will be • Business Continuance used to determine Extract other goals of the Resource & • Skill Alignment IT organization Talent • Resource Quality Management • Team Development 17 © 2010 Systems Plus Proprietary and Confidential
- 18. Appendix - Setting Up the Scorecard Categorized Into 1. Goals of the CIO 2. Themes Gives Visibility Stated and To Weighted As Comprised Of 4. Measures 3. Objectives / Weights 3. Objectives 3. Weightings 4. Measures Example Only • Manage Spend on Services and initiatives to Sr. No Theme Name Weightage Budget Targets 1 Finance Financial • Optimize Spend for Specific Technology Areas Impact 2 Customer • Return/Benefit Impact of Investments(e.g. savings Outcomes on internal headcount) 3 Solution 4 Service • Manage Customer Relationship (summary of qualitative measures) Weightings 5 Resource Client & • Drive quality of the Service Offering (summary of Relationship Management qualitative measures) Total 0% • Grow the Maturity of the Offerings and Relationship through Governance • Manage Initiative Delivery to Milestone and Scope Solution Targets Performance • Deliver projects within estimated Capacity • Use Competency Center to Drive Innovation Drivers • Manage System Availability and Performance (Up-Time Rate) Service • Manage Resolution quality and Response (Mean Performance Time to Resolve) • Reduce negative Business Impact/Increase Continuance (% attained) Measures • Align Skills and Portfolio to Business Needs Resource & • Drive quality of the Offering and Resources Talent • Increase Customer Business Knowledge of Management Team 18 © 2010 Systems Plus Proprietary and Confidential
- 19. Appendix – Using the Scorecard Financial Data • Budget Financial • Actual Analysis System • Forecast •Entered on regular rhythms (M, Q, Y) •Entered by off-shore team •Updated / Approved by VMO Support Delivery Ticket • Number • Delivery Tracking • Resolution System Customer Data Customer • C-Sat Scores Manually Load • Value-Add Services Data into Tool Survey Tool(s) • Governance Participation (M, Q, Y) Project Delivery • Schedule PMO Tool • Milestones • Deliverables Setup •Occurs at start of engagement •Includes objectives, weights, Financial Data Resource • Hours measures, and tolerances Tracking Tool • Skill / Rate Card •Can be at regular intervals (Q, Y) • Attrition / Turnover 19 © 2010 Systems Plus Proprietary and Confidential
- 20. For any queries contact us at : ask.gurus@sourcinggurus.com India Head Office: US Office: UK Office: Systems Plus Solutions Systems Plus Solutions USA LLC Systems Plus Solutions (UK) Ltd. Hiranandani House, Suite 1-A, Soane Point, Saraswat Lane, 9,Glenmere PI. 6-8 Market Place,. Santacruz (W), Old Bridge, Reading RG1 2EG, Mumbai – 400054, India NJ 08857, USA Berkshire, UK. Tel: +91 22 6159 1100 Tel: +1 732 414 8943 Tel: +44 118 925 5465 20 www.SourcingGurus.com © 2010 Systems Plus Proprietary and Confidential