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ER FALL

SU MMIT

2014

A Guide to a Strong Contract and

a Successful Relationship in General

Corporate Support Services

The Fine Print:

Canon Business Process Services

Ted Ardelean, Director, R&D Marketing

Kevin Shotsberger, Director of Operations Midwest Region

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2014

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The Fine Pr int : Contract ing for General Corporate

Support Services

A Guide to a Strong Contract and a Successful Relationship

Ted Ardelean

Kevin Shotsberger

Presented by

Ted Ardelean

Director

R&D Marketing

Kevin

Shotsberger

Director of

Operations –

Midwest Region

4

About Canon Business Process Services, Inc .

S u b s i d i a r y o f C a n o n U . S . A . , a C a n o n G r o u p C o m p a n y

S e r v i c e s

• BPO: AP, document processing, legal coding

• DPO: Imaging, records management, print, mail

• Office Services: Reception, hospitality, A/V, Admin Services

• eDiscovery: Physical, digital, consulting, technology

5 , 0 0 0 p e o p l e

S e r v i c e d e l i v e r y :

• On-site, Off-site, Off-shore processing centers

• Six-sigma process excellence based methodology

• Customized, supplementing client technology with CBPS technology

I A O P T o p 1 0 0 G l o b a l O u t s o u r c i n g L e a d e r 2 0 0 7 t o 2 0 1 4

5

S e r v i c e d e l i ve r y: • On-site, Off-site, Off-shore processing centers

• Six-sigma process excellence based methodology

• Customized, supplementing client technology with CBPS

technology

S e r v i c es• BPO: AP, document processing, legal coding

• DPO: Imaging, records management, print, mail

• Office Services: Reception, hospitality, A/V, Admin Services

• eDiscovery: Physical, digital, consulting, technology

S u b s i d i a r y o f C a n o n U . S . A. ,

a C a n o n G r o u p C o m p a n y

5 , 0 0 0 p e o p l e

I AO P To p 1 0 0 G l o b a l

O u t s o ur c i ng L e a d e r 2 0 0 7 t o

2 0 1 4

About Canon Business Process Services, Inc .

6

Agenda

ON-SITE CORPORATE SUPPORT

SERVICE S OVERVIEW• Range and Scope of Services

• On-Site Service Characteristics and Requirements

CLIENT REQUIREMENTS AND

CONTRACT CONSIDERATIONS FOR:• Employees and Staffing

• Equipment and Supplies

• Disaster recovery Considerations

• Contract Change Dynamics

• Mutual Risks and Liabilities

• Serviced Delivery Considerations

• Ensuring the Value of SLA’s

• Potential Support Services Outcomes and Impacts

Q&A

7

Overview: Range and Scope of Support Services

C O R P O R A T E S U P P O R T S E R V I C E S P R O V I D E D

O N - S I T E C AN B E O F F - S I T E AN D O F F - S H O R E C AN B E

• Mailroom, Shipping & Receiving

• Central reprographics (print/copy centers) and

office print management

• Document Processing Centers (combined mail,

print, scanning activities)

• Records Management and File Room

Management

• Reception and Telephone Console Operation

• Audio Visual and Conference management

• Concierge Services

• Light office maintenance

• Facilities Management Administration

• Material handling and internal logistics

• Professional Administrative Services

• Overflow reprographics (print/copy centers)

• Document Processing Centers (scanning

activities)

• Records Storage

• Hard copy imaging conversion

• Indexing of scanned documents

• Quality Assurance controls

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On-si te Service Character ist ics That Impact Contract

On-site Service

Characteristics

SLA

Employee

Concerns

Equipment &

Supplies

Disaster &

Recovery

Exceptions to

Scope of Work

Start-up &

Termination

Risk and

Liability

Service

Delivery

9

Employees/Staff ing

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Benefits Offered

• Compensation and salary ranges

• Hiring staff back in-house or transfer to a new

provider

• Bonded, background check expenses

• Easy staff placement or discharge

• Permanent or Temporary Staff

• Similar vacation and holiday policy, HC plan,

401K Plan to that of client

• Maintain salary for certain staff being

outsourced (Re-badged)

• Restrictions: Employee transfers 20% fee.

Enablers: SOP documentation for job continuity

• Bond coverage ‒ 1 mil. each employee

• In placement provider has final decision

• In discharge, client has final decision

• Not a contract issue as much as a cultural issue

10

Equipment and Suppl ies

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Flexibility to replace equipment any time at no

charge (e.g. print, scan & mail equipment)

• No mark-up on supplies

• Volume discounts benefits (e.g. UPS, FedEx,

Staples, toner, postage, etc.)

• 10% of equipment replaceable during life cycle

• Leases assumed by client upon service

termination, prior to contract expiration

• Purchases made in client name. Client pays

supplies directly. Provider distributes reviews,

approves and processes invoices.

• Provider sets up client account. Client gets

better price, by leveraging providers buying

power. No mark-up

11

Disaster Recovery Preparedness

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Back-up, over-flow facility

• Established Policy & Procedure, training

• Provider contingency facility or contract with 3rd

party, as backup

• Joint plan. Provider required to train staff to

follows client policy and procedures

12

Except ions to Scope of Work

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Freedom/flexibility to quickly change, redirect

services provided

• No formal change order or contract

amendments for scope of service

• Amendments to service scope and price

• Scope of service written in broadest terms.

• Too much client interference can erode provider

margin, interfere with SLA

• Provider exposed to greater liability.

Comprehensive, limited liability ($1 to $10

million) carried by provider

• For significant and permanent service changes

(add a service) contract amendments are made

13

Start -up/terminat ion and changing providers

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Start-up and implementation planning and costs

• Terminate for convenience or for cause

• Written implementation plan and description of

client involvement requirements

• Costs amortized into monthly payments

• Outstanding lease obligations recovered upon

termination for convenience

• Employee transfer fee 20% of annual salary

• Full knowledge transfer and coordination with

client or new provider

14

Mutual Risks and Liabi l i ty Protect ion

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Unlimited Liability vs. Defined Liability

• Comprehensive insurance coverage

• Disaster recovery and information's security

• Price guarantee/Volume guarantee

• Limit provider liability through caps $1 to 10

million

• Mandatory staff training on information security

practices

• Provider at risk when the actual client

volume/data is less than what was proposed‒ Minimum volume clauses protect both parties

15

Service Del ivery and Operat ional Performance

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• Can Provider cover all client locations

• Are there specific or unique operating

requirements

‒ Hours of operation, partial and multi-shift

needs

‒ Limited staffing at some locations

‒ -100% back-fill coverage

• “At-Risk” Parameters

• Gain Share pricing model

• Small, remote, locations may require 3rd party

support for 100% back-fill or part time (Floaters)

support backup

• SLA for machine maintenance may need to be

relaxed for remote locations.

• Penalties might need to vary according to scope

and location size

• Provider financially obligated to certain SLA

attainment

• Creates win-win opportunity

16

Ensur ing the Value of SLA’s

C O M M O N C L I E N T R E Q U I R EM E N TS C O N T R AC T I S S U E AN D P R AC T I C E

• What service levels should be included

• How will performance be measured and

reported

• To what level does the supplier agree to perform

• Can the minimum and expected service levels

change over time

• Will the SLA include service-level credits (“At

Risk”)

• Strong correlation with the value the supplier is

expected to deliver

• Availability of data to measure performance

• Focus – Less metrics, clear measurement

standard and formula – units, time, etc.

• Establish minimum and expected (normal)

service level

• Create enhanced targets if “Gain Share” is

contractual

• SLA can include a fixed schedule of increasing

requirements

• Performance can be adjusted as a % of prior

year’s performance

• Credits have substantial advantages over

damages, and are easier to collect

17

Advancing Business Performance to a Higher Level

Thank youtardelean@cbps.canon.com

Tel: 212-502-2122

kshotsberger@cbps.canon.com

www.cbps.canon.com

Questions

DE

NV

ER FALL

SU MMIT

2014

Session #WS15

The Fine Print: A Guide to a Strong Contract and a Successful

Relationship in General Corporate Support Services

Speakers:

Ted Ardelean, Director, R&D Marketing

tardelean@cbps.canon.com

Tel: 212-502-2122

Kevin Shotsberger

Director of Operations Midwest Region

kshotsberger@cbps.canon.com