Driven by the financial needs,
competitive managed service market, demanding business needs, and improved
remote network management, the organizations are delegating control of the
network including service management or carrier services to third party providers.
The possible advantages of
implementing outsourced managed network services include reduced COO or cost of
ownership, improved operational performance, abstracted management, and access
to intellectual property or external expertise. Holistic outsourced models
enable organizations to allocate better internal resources on the core business
activities and strategic projects.
Nevertheless, relinquishing an
end-to-end responsibility for network infrastructure without addressing
systematically the service delivery model exposes an organization to
significant operational, financial, and strategic risks. To mitigate such risks
and maximize the results, the organizations must consider these best practices:
- Simplify the Process for the Provider and Service
Termination Tower
Firstly, structure the contract with
reduced bundling so particular services may be terminated without affecting
others. For instance, in a recent project that involves an offshore provider,
the contract is made with separate service towers. Secondly, retain the broad
rights to terminate for cause and enable termination because of provider
performance issues. Thirdly, establish particular termination processes during
the contract negotiations and establish them into the agreement. Address all
termination aspects explicitly including termination-relation charges, provider
obligations after the termination, provider wind-down support, and transfer of
the contracts, provider personnel, and assets.
It’s always best to negotiate the
termination details while you have leverage as this will make the termination
much easier with reduced costs and legal or operational difficulties. Waiting
to negotiate such terms until you are seriously initiating or contemplating
termination is too late for the reason that the provider will not cooperate
well.
Knowing the well-defined processes
of termination are in place with the service towers that may be peeled off
makes the termination more credible and effective stick to use once the
provider isn’t performing.
- Establish Clear SLAs with Defined Credits in the
Contract
The SLAs must ramp up based on the
duration of service issue, number of the defaults, and severity. In addition to
that, they must have both non-financial and financial remedies requiring:
·
- New customer references every 6 months.
- Performance improvement plans.
- Detailed remediation plans.
- Rapid processes for escalation to the senior or
executive management levels of the provider.
To improve SLAs, the company should
dedicate internal resources when monitoring provider performance, address
default, and escalate chronic problems consistently with the use of the
predefined processes to hold a provider accountable.
Migrating crucial IT network
services and infrastructure to a completely outsourced environment is risky and
complicated, but also it has the potential for efficiency benefits and
significant cost. Migrating risks needs preparing and looking beyond sourcing
even through developing a good sourcing strategy, flexible contract terms,
negotiating strong, having the right provider management as well as continuous
IT involvement. Through taking such steps, the organizations may help ensure
managed service providers deliver real value to their customers and business.
For more information please view this blog
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