Establishing the metrics and sharing the results helps both the internal IT organization and the service providers remain focused on delivering results and value to the business.
There are three layers of ITO governance that are typically crafted before the transition takes place: Strategic Governance, Cross-Functional or Integration Governance and Operational Governance. The framework and the related processes need to be in place prior to transition.
ITO governance becomes even more important when a client needs to manage a multi-vendor environment. It provides a standard platform in which both the client and the service providers agree to communicate, monitor progress and make strategic decisions collectively. The output from these meetings provides a roadmap to enhance the relationships and focus on improving overall performance and unlock the value of the ITO deal.
As mentioned earlier, ITO governance needs to be established before transition takes place. Typically, a TMO (Transition Management Office) is established to help manage the transition. It is recommended that transition is run by the client with input from the various service providers. Specific transition metrics and milestones need to be established and agreed upon prior to the commencement of transition. It is vital for the client to dedicate full time internal ITO transition managers to help smooth out any issues that typically are encountered during this major change in the IT environment. Working closely with the internal HR team ensures that a proper change management program is established and the right expectations and incentives are discussed and communicated. An often overlooked task that many IT organizations forget to look at is deciding what the new IT organization will look like and behave in the new environment. Titles, roles, structure, span of control, incentives and rewards need to be clearly articulated of what the new IT organization will look like. A strategy session should take place between the IT senior management team and invite the service providers to participate as well. Although it is hard to establish specific demarcations of responsibility between the client and the service providers, these sessions provide good guidance on how the client and the service providers should interact.
As the transition is taking place through the TMO office, it will become apparent that some of the client team members will become part of the steady state vendor management office. It is recommended that if a PMO office exists in the organization that both the VMO and PMO offices should be integrated to allow for a seamless operation relating to the demand management process. Since the service providers will become a large source of human capital supply for projects, enhancements and steady state operations it is recommended that a common resource monitoring/performance dashboard is created to provide visibility into the demand and performance of the resources.
Starting from the top of the pyramid, a strategic committee should be established with an agenda to discuss changes in the IT strategy (based on business requirements) and how these changes are affecting the ITO strategy. Critical issues, financials, relationship management and high level performance metrics should be shared as part of the monthly or quarterly Strategic Governance meetings.