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Thursday October 30th 2017

- Realising Business Value in the

Digital Age

Relationship Management and Governance

Presenter

Adrian Quayle

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DigitalDefine and execute digital business strategies by structuring and managing the strategic partnerships of the digital ecosystem to create competitive differentiators.

Strategic SourcingOptimize IT and Business Process operations through strategic partnerships to achieve core business objectives beyond predictable and low cost services.

Governance, Risk & ComplianceAssess, manage and mitigate governance, compliance, audit and Cyber risks. Maximize Sourcing value through Managed Governance Services (MGS) for vendor portfolio and relationships leveraging best practice processes, automation, and state-of-the-art technology.

Global StrategyFull range of management consulting services for private sector, governments and donor agencies to assist in the development of new market strategies to support sustainability and catalyze business acceleration.

Avasant LawExpansive suite of custom tailored legal services, delivered with experienced legal team with focus, across Technology Transactions, Corporate Law, Intellectual Property, Market Expansion, and Information Privacy & Startup Advisory areas.

Avasant FoundationOur mission is to enable emerging regions to realize their potential. In partnership with leading foundations and institutional donor agencies, we provide deserving youth access to skills training and education with the goal of job creation in the digital economy.

O V E R V I E W

98%

Customer

Satisfaction

Deals

Negotiated

Countries

$100B+ 50+

1,000+successful engagements

What we doBusiness & IT TransformationDevelop and execute a strategic transformation plan creating new operating model and technology footprint designed to drive business performance improvement and customer satisfaction.

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Key Topics For Discussion

Understanding the Relationship

Management Challenges

What’s happening in Outsourcing

Deals

Building Collaborative

Relationships

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How Did We Get Here? Our Outsourcing Journey

• Services Outsourcing (IT) began as ‘Facilities Management’ in the 1960s and rapidly grew,

• Today’s Outsourcing Industry leverages “technology, process & people” to where it is a global industry with revenues over $10+ trillion dollars,

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Market Trends and Dynamics in Sourcing

Innovation in contracts as Buyers are looking for

more business objective driven contracts than

pure service contracting

Improved business alignment with industry driven

solutions with strong integration across

infrastructure, applications and operations

Service and result oriented buyers are moving

towards integrated, scalable solutions to delivery

on business outcomes

Service Automation providing for the need for

greater efficiency in service delivery, faster

response and lower service risk levels

Agile Multi-Sourcing provides higher delivery

efficiency , corporate agility and fail fast culture

for sustained services optimization

Greater degree of planning for Cloud adoption

as more traction towards developing a cloud

strategy and planning to explore cloud

opportunities

DevOps gathering momentum as business

demands more agility and faster time to market.

Agile enterprises are shortening the develop and

deploy lifecycle across domains

Multi-Sourcing with a combination of internal &

outside resources - ranging from large service

providers to smaller niche players

Mobility thrust on App based Self service model to

enhance customer experience.

Expect design, aesthetics and human factors to

form a larger and more determinant role in

product design and product success with User

Experience (UX)

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Avasant Point of View

Value Leakage in Sourcing Relationships

Retained Organization

Capacity

Incomplete Transition

Management Misaligned SLA & Business

MetricsClient/ Provider

Operational Misalignment

Poor Communication

& Strategy Execution Lack of Vendor

Management Organization

There can be as much as a 40-70% value leakage on the average outsourcing contract

In the current economic environment your deal must deliver on the service, quality and cost savings promised. Transitions and Outsourcing implementation that are not executed well lead to:

• Value Leakage – Need longer time to ensure return on investment as per business case

• Operational Fragmentation – Lack of clarity in the roles and responsibilities of the retained organization

• Strained Relationship – Breakdown in delivery efficiencies, service quality and customer satisfaction

Skills/ Competency

Challenges

10% - 20% Value Loss

Operational

Challenges

10% - 20% Value Loss

Relationship

Challenges

10% - 20% Value Loss

Expected

ValueRealized

Value

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Digital Enterprise

Enterprise Digital Transformation

Initiatives involve executives other

than the CIO

Executives undergoing formal digital

transformation efforts in 2017

Customer Driven Enterprise Value Chain

Business Processes automated by

transformation-focused

organizations in 2016

Traditional Value Chains

Analog Speed

Digital Enterprise Value Chains

Digital Speed

Source: Altimeter Group and MIT Sloan

88%

78%

59%

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What is driving Governance Transformation?

Evolving Buying Behaviour

Analytics &

Decisions

A new breed of

Suppliers

01

02

03

Demand for Digital

Transformation

Focus on Business

Outcomes

Increased Risk &

Regulatory Compliance

06

07

08

Value Optimization

05

04

New Delivery Models

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Governance at the Heart of the Outsourcing Lifecycle Model

• Governance enables effective strategic leadership of the relationship and

realization of its desired value

• Governance includes the processes, with appropriate levels of management to

optimally align the ambition and interest of all stakeholders

Source ISO 37500: 2014

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Governance as a Service - Case Study

Critical Financial Infrastructure Institution

This Institution needed to establish managed services

governance capabilities and outsource

transactional governance services to drive,

efficiency consistency and visibility

Identified significant savings opportunities

through improved governance, increased

consistency of IT support for key business groups

and improved alignment with managed services

providers

Identified core capabilities missing from their

governance competencies and advised and

established necessary internal processes

Actively managing over $150 million in third

party spend supporting the VMO for the

institution. Savings of 25% delivered across the

portfolio

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Collaborative Business Relationship Management - ISO 44001:2017

• Gathered pan-industry good

practice for:

o establishing,

o running,

o improving,

• Covers range of

collaborative relationships -

including outsourcing deals.

• Collaborative relationships

can be multidimensional

Consortia

Eco systems

Alliances

Partnering networks

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Why is the Collaborative Business Relationship Management Plan so Powerful?

• Process enables (permits) the parties to have (otherwise) difficult discussions on the relationship

• Preparation and sharing of the joint Relationship Management Plan (RMP)1 puts collaboration issues and social value on the table

• Joint RMP meetings focus parties on the (mutual) benefits of the collaboration

• In a collaborative ecosystem it provides consistent common processes, language and alignment between organisations

1 Source ISO 44001:2017

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Relationship Management Plan Benefits - Case Study

• Leading global technology group -

high capital value project business

division (Business A) and SME supplier of

services (Business B)

• Business A wanted to demonstrate to

customers and other group businesses

independently that it was a highly

collaborative business (USP) using BS

11000 / ISO 44001

• At initial joint RMP meeting SME

indicated the invoicing process was

highly labour intensive and costly.

• Outcome - Very quickly the business

group’s finance team implemented a

new process – dramatically reduced

the processing costs for all suppliers.

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The Result: Business value driven Governance

• Increased Revenue

• Optimal ROI

• Better

• customer experience

Innovation Efficiency Performance

• Applied Innovation

• Competitive Advantage

• Allow for fast transitions

• Improved cycle times

• Cost optimization

• Business centric

• Predictive, proactive,

• leverage trends

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• The increasing focus on business outcomes and

new business transformation initiatives such as

digital are presenting significant challenges to

realizing the value of sourcing

• New governance practices are needed to

Manage Ecosystems of Relationships in the New

Digital Enterprise

• Sourcing management staff need a strategic

perspective, relationship & collaboration skills,

and great understanding of end-to-end, multi-

provider service processes

• Develop and use joint Relationship Management

Plans to facilitate collaboration across your supply

chain.

Closing Thoughts

Empowering Beyond

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Adrian QuayleManaging Partner Europe

adrian.quayle@avasant.com

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