For Sourcing & Vendor Management Professionals

Address The Governance Requirements Of Managed Outcome Engagements

by Bill Martorelli, October 26, 2009

The intensity of the recent economic crisis focused attention on immediate savings exemplified by renegotiation on billing rates for application development and maintenance (ADM) services, among other service types. However, with signs of stabilization . . .

For Sourcing & Vendor Management Professionals

Checklist: SOW And MSA Considerations For Managed Outcome Engagements  (37 KB XLS)

by Bill Martorelli, October 13, 2009

One of the keys to success in establishing managed outcome relationships is to contract for them successfully using elements of the relevant toolset such as the statement of work (SOW) and the master services agreement (MSA). In practice, the two document . . .

For Sourcing & Vendor Management Professionals

Operational-Level Agreements Aid In Multisourcing Efforts

by Bill Martorelli, October 1, 2009

As customers have moved to embrace a more selective outsourcing approach, multisourcing techniques are becoming more tangible and less reliant on best efforts and good will. As a result, clients seek mechanisms with which they can manage multiple suppliers . . .

For Sourcing & Vendor Management Professionals

Creating Improvement Incentives In Application Outsourcing Contracts

by Bill Martorelli, August 17, 2009

Both suppliers and their clients continue to struggle with how to price applications outsourcing (AO) relationships for the best alignment of interests and shared risk. But only a relative minority of clients are ready for the leap to managed outcome . . .

For Sourcing & Vendor Management Professionals

Outsourcing SAP Operations Expands With Economic Uncertainty

by Bill Martorelli, Liz Herbert, August 17, 2009

Continuing economic pressures are contributing to the new popularity of outsourcing services for SAP operational services, complementing the large, well-established market for implementation services. Diverse offerings now coexist within the marketplace, . . .

For Sourcing & Vendor Management Professionals

Observe The Limitations Of SLA Penalty Clauses

by Bill Martorelli, May 18, 2009

Sourcing and vendor management professionals continue to struggle with devising contracts that balance risk between themselves and their suppliers. One of the most difficult challenges is devising service-level regimes in which a certain percentage of . . .

For Sourcing & Vendor Management Professionals

Function Points And Application Outsourcing

Usage Is Still Constrained, But Looks Set To Rise

by Bill Martorelli, April 23, 2009

Services buyers increasingly look for a standard, unambiguous way to evaluate the productivity of numerous outsourcing partners so that they can keep their suppliers "honest." Moreover, outsourcing consultants increasingly recommend using function points . . .

For Sourcing & Vendor Management Professionals

Emerging Outsourcing Models Require New Sourcing Tactics

Adjust Your Approach To The Reality Of New Alternatives

by Bill Martorelli, April 16, 2009

Emerging outsourcing models — including managed hosting, virtual managed hosting, and application hosting and SaaS — are proliferating. They generate interest among business buyers because of their flexibility and cost effectiveness. However, they often . . .

For Sourcing & Vendor Management Professionals

New Contract Terms For Outsourcing Deals

Economic And Vendor Risk Issues Require Sourcing Teams To Change Contract Clauses

by Bill Martorelli, March 17, 2009

A number of recent events involving vendor instability and geopolitical risk are underscoring requirements for tight contractual protections on the part of outsourcing clients. In the wake of events such as the admission of fraud by Satyam's CEO and recent . . .

For Sourcing & Vendor Management Professionals

Look To Managed Hosting As An ITO And Colocation Alternative

by Bill Martorelli, February 2, 2009

Managed hosting has evolved significantly since its initial focus on managed Web storefronts, to a more general-purpose delivery mechanism, including a form of IT outsourcing ideally suited for the midmarket. While it still pales in comparison to the . . .

For Sourcing & Vendor Management Professionals

Navigating The Virtual Managed Hosting Solutions Landscape

by Bill Martorelli, January 13, 2009

Virtual managed hosting solutions have been available for more than five years, although their impact has been muted given enterprise customers' preference for dedicated infrastructure solutions. Economic pressures are increasing enterprises' interest . . .

For Sourcing & Vendor Management Professionals

SLAs For Outsourced Testing Service Relationships Pose Unique Challenges

by Bill Martorelli, December 10, 2008

Related revenue growth among outsourcing suppliers shows that more customers are embracing outsourced testing services. While these engagements run the gamut from consulting, to staff augmentation, to defined outcome relationships, the latter approach . . .

For Sourcing & Vendor Management Professionals

A Stepwise Approach To Overcome Independent Testing Services Relationship Challenges

by Bill Martorelli, October 23, 2008

Much of the recent growth in outsourced application services has been fueled by customers engaging independent testing services where the development provider is separate from the provider performing the testing. This approach addresses the inherent conflict . . .

For Sourcing & Vendor Management Professionals

Capture Value From The Growing Diversity In Outsourced Applications Testing Services

by Bill Martorelli, October 15, 2008

Testing is the fastest growing segment of the applications outsourcing industry for many suppliers, as enterprise customers continue to embrace distinct services for quality assurance (QA). The landscape for outsourcing testing consists of leading multinational . . .

For Sourcing & Vendor Management Professionals

Resilient Applications Outsourcing Demand Will Constrain Buyers' Supplier Options

by Bill Martorelli, September 5, 2008

Despite the prospect of economic uncertainty, demand for applications outsourcing services is robust according to the results of Forrester's Enterprise IT Services Survey, North America And Europe, Q2 2008. Survey findings show that a considerable percentage . . .

For Sourcing & Vendor Management Professionals

North American Applications Outsourcing Market Overview For 2008

by Bill Martorelli, July 24, 2008

Though a mature market, applications outsourcing in North America continues to expand and evolve. Buyers show little sign of reducing their appetite for outsourcing services despite the economic slowdown. Value propositions of the major provider segments . . .

For Sourcing & Vendor Management Professionals

Identifying Opportunities For Managed Applications Outsourcing Engagements

by Bill Martorelli, July 11, 2008

Many enterprises that are seeking greater value from their applications outsourcing relationships are contemplating transitioning their outsourcing relationships built on staff augmentation to the managed outcome model, often under some pressure. Managed . . .

For Sourcing & Vendor Management Professionals

Building A "Starter Set" Of SLAs For Managed Application Outsourcing Relationships

by Bill Martorelli, June 23, 2008

Many application outsourcing services customers are anxious to achieve greater value beyond labor arbitrage. One approach that an increasing number of firms are exploring involves restructuring application outsourcing relationships to deliver defined . . .

For Sourcing & Vendor Management Professionals

Checklist For Managed Outcome Engagements  (33 KB XLS)

by Bill Martorelli, Allison Thresher, May 2, 2008

Clients seeking to enter managed outcome engagements should perform their own due diligence in evaluating readiness factors relating to the process, client readiness and supplier maturity.

For Sourcing & Vendor Management Professionals

From FTEs To Results: Going Beyond Labor Arbitrage To Managed Outcome Relationships

by Bill Martorelli, Stephanie Moore, April 18, 2008

Companies have spent years expanding their use of applications development and maintenance services based on a time and materials (T&M) model. Today, many service buyers feel they have maxed out their gains from this approach, and from the labor arbitrage . . .

For Sourcing & Vendor Management Professionals

SaaS Clients Face Growing Complexity

Large Enterprises Require Due Diligence For Effective SaaS Purchases

by Liz Herbert, Bill Martorelli, April 17, 2008

With adoption of SaaS among both large enterprise and small and medium-size business (SMB) clients on the rise, according to recent data from Forrester's Business Data Services, gone are the days when large corporations could afford to let buyers make . . .

For Sourcing & Vendor Management Professionals

Industry Standards For Outsourcing: Think Beyond The Checklist

by Bill Martorelli, April 7, 2008

Sourcing and vendor management professionals routinely solicit and verify their suppliers' credentials in the Software Engineering Institute of Carnegie Mellon University's Capability Maturity Model Integrated Development (CMMI-DEV) and perhaps the IT . . .

For Sourcing & Vendor Management Professionals

Expediting The Services Sourcing Process With Master Services Agreements

by Bill Martorelli, January 25, 2008

Of the complaints about RFP-driven services procurement, one of the most persistent is that the RFP process takes too much time to complete. One of the principal reasons why RFP-driven procurement processes tend to take significant amounts of time is . . .

For Sourcing & Vendor Management Professionals

Toward A Next-Generation Services Sourcing Process: Making RFPs More Interactive

by Bill Martorelli, January 24, 2008

Sourcing and vendor management professionals are under increasing pressure to streamline RFP processes while adding tangible value to the services sourcing process. Most firms we spoke with believe that, despite its flaws, the RFP process remains a useful . . .

For Sourcing & Vendor Management Professionals

RFP Alternatives For Buying IT Services

by Bill Martorelli, January 16, 2008

Numerous sourcing and vendor management professionals are evaluating additional alternatives including more provider-inclusive approaches to services procurement, where provider discussions and interactions take the place of activities that otherwise . . .