| Introduction to IT Outsourcing | p. 1 |
| What Is IT Outsourcing? | p. 1 |
| History of IT Outsourcing | p. 2 |
| Size and Scope of the IT Outsourcing Market | p. 5 |
| Different Sourcing Models | p. 6 |
| Facilities Management | p. 6 |
| Selective Outsourcing | p. 7 |
| Tactical Outsourcing | p. 8 |
| Strategic Sourcing | p. 8 |
| Transformational Outsourcing | p. 10 |
| Transitional Outsourcing | p. 10 |
| Business Process Outsourcing | p. 11 |
| Joint Ventures | p. 12 |
| Benefit-based Relationships | p. 13 |
| Insourcing | p. 14 |
| Offshore Outsourcing | p. 15 |
| The Case For and Against Outsourcing | p. 17 |
| Introduction | p. 17 |
| Arguments in Favour of Outsourcing | p. 17 |
| Enabling the Organization to Focus on Its Core Business | p. 18 |
| New Business Development | p. 19 |
| Assisting Major Reorganizations | p. 20 |
| Quality and Service Improvements | p. 22 |
| Access to Technical Expertise | p. 23 |
| Financial Advantages | p. 25 |
| Flexibility and Control | p. 26 |
| Arguments Against Outsourcing | p. 27 |
| Negative Impact on Business Strtegy | p. 28 |
| Escalating Costs as Business Changes | p. 29 |
| Loss of Flexibility and Control | p. 29 |
| Service Provider Concerns | p. 30 |
| Demotivated IT Professionals | p. 31 |
| Loss of Technical Expertise | p. 32 |
| Security and Confidentiality Risks | p. 32 |
| If Your Department Is to Be Outsourced | p. 33 |
| Objectives and Parameters for Outsourced Services | p. 35 |
| Introduction | p. 35 |
| The Importance of Objectives | p. 36 |
| Single Aim: Reduce Costs | p. 37 |
| Multiple Objectives: Value for Money and Technological Development | p. 37 |
| Crisis Management: Escaping Financial Difficulties | p. 38 |
| Understanding Stakeholders' Objectives | p. 39 |
| Analysing Objectives | p. 40 |
| Selecting Outsourcing Candidates | p. 48 |
| Benchmarking | p. 51 |
| In-house Improvements | p. 52 |
| Defining Service Requirements | p. 54 |
| Business Case Analysis | p. 56 |
| Executive Summary | p. 57 |
| Strategic Case | p. 57 |
| Current Services | p. 57 |
| Options Analysis | p. 57 |
| Benefits Analysis | p. 58 |
| Cost Analysis | p. 58 |
| Sensitivity Analysis | p. 59 |
| Affordability Analysis | p. 60 |
| Commercial Case | p. 60 |
| Risk Management | p. 60 |
| Staff Transfers | p. 60 |
| Outsourcing Programme Management | p. 64 |
| Choosing a Service Provider | p. 67 |
| Introduction | p. 67 |
| Managing the Selection Process | p. 69 |
| Senior Executives | p. 69 |
| Business Managers | p. 69 |
| Purchasing Team | p. 70 |
| Expert Advisors | p. 70 |
| Investigating the Computer Services Market | p. 71 |
| Evaluation | p. 73 |
| Evaluating Relationships | p. 74 |
| Evaluating Service Solutions | p. 76 |
| Commercial Evaluation | p. 77 |
| Evaluating Costs and Benefits | p. 77 |
| Evaluating People Issues | p. 78 |
| Evaluation Process | p. 78 |
| Short-listing Potential Suppliers | p. 79 |
| Selecting the Preferred Bidder | p. 83 |
| Tender Documents | p. 84 |
| Evaluating the Responses | p. 91 |
| Negotiations | p. 93 |
| Contract Award | p. 97 |
| The Importance of the Relationship Between Customer and Supplier | p. 98 |
| Managing Performance | p. 99 |
| Introduction | p. 99 |
| Building Outsourcing Relationships | p. 100 |
| Understanding Stakeholder Perspectives | p. 104 |
| Outsourcing "Partnerships" | p. 105 |
| Communicate, Communicate, Communicate | p. 106 |
| Transition | p. 107 |
| Incentives and Disincentives | p. 109 |
| Adding Value | p. 110 |
| Contract Management | p. 112 |
| Service Management | p. 114 |
| Service Users | p. 116 |
| Contract Administration | p. 117 |
| Contract Maintenance | p. 117 |
| Charges and Cost Monitoring | p. 119 |
| Ordering Procedures | p. 119 |
| Payment Procedures | p. 120 |
| Budget Management | p. 121 |
| Performance Reporting | p. 121 |
| Asset Management | p. 122 |
| Outsourcing Management Organization | p. 122 |
| Meetings | p. 125 |
| Change Control | p. 126 |
| Issue Management and Problem Escalation | p. 129 |
| Critical Success Factors | p. 132 |
| Measuring Performance | p. 135 |
| Introduction | p. 135 |
| Linking Performance Measures to Objectives | p. 139 |
| Setting a Baseline | p. 140 |
| Benchmarking | p. 142 |
| Measuring Benefits | p. 143 |
| Involving Service Users | p. 145 |
| Service Level Management | p. 146 |
| Monitoring | p. 148 |
| Service Level Reports | p. 150 |
| Performance Review Meetings | p. 151 |
| Service Level Management Problems | p. 153 |
| Service Level Agreements | p. 154 |
| Service Level Agreement Structure | p. 156 |
| Sample Service Level Agreement Contents | p. 157 |
| Managing Multiple Suppliers | p. 159 |
| Risks and Controls | p. 163 |
| Introduction | p. 163 |
| Outsourcing Contracts | p. 163 |
| Memorandum of Understanding | p. 166 |
| Contract Structure | p. 167 |
| Contract Main Clauses | p. 168 |
| Service Provision | p. 179 |
| Asset Transfers | p. 181 |
| Staff Transfers | p. 183 |
| Contract Schedules | p. 184 |
| Outsourcing Risks | p. 185 |
| Unrealistic Expectations | p. 186 |
| Inadequate Contracts | p. 187 |
| Poor Relationship with Your Supplier | p. 187 |
| Supplier Lock-in | p. 188 |
| Loss of Flexibility | p. 188 |
| Loss of Control | p. 189 |
| Risk Management | p. 190 |
| When Outsourcing Fails to Deliver | p. 195 |
| Introduction | p. 195 |
| Reasons Why Outsourcing Fails | p. 196 |
| Unsatisfactory Outsourcing Relationships | p. 197 |
| Changes in the Business Environment | p. 198 |
| Unsatisfactory Outsourcing Contracts | p. 200 |
| Lack of Flexibility | p. 202 |
| Higher Costs than Anticipated | p. 202 |
| Poor Service Levels | p. 204 |
| Unsatisfactory Performance Measures | p. 204 |
| Inadequate Contract Management | p. 206 |
| Warning Signals | p. 206 |
| Challenging Failure | p. 208 |
| A Ten Step Programme for Turning Failure into Success | p. 209 |
| Formal Action Against Your Supplier | p. 218 |
| Arbitration | p. 219 |
| Alternative Dispute Resolution | p. 220 |
| Litigation and Contract Termination | p. 221 |
| Backsourcing | p. 223 |
| ASPs, WASPs and the Future of Outsourcing | p. 227 |
| Alternative Supply Models | p. 227 |
| Application Service Providers (ASPs) | p. 228 |
| Managed Service Providers (MSPs) | p. 234 |
| Storage Service Providers (SSPs) | p. 236 |
| Managed Security Service Providers (MSSPs) | p. 237 |
| Wireless Application Service Providers (WASPs) | p. 238 |
| ASP Application Aggregators (AAAs) | p. 239 |
| @xSP | p. 239 |
| Utility Computing | p. 240 |
| Other Outsourcing Trends | p. 241 |
| Business Process Outsourcing (BPO) | p. 241 |
| Offshore Outsourcing | p. 242 |
| New Sourcing Strategies | p. 243 |
| Computer Services Industry | p. 244 |
| The Impact of Outsourcing on the IT Department | p. 247 |
| Conclusion | p. 251 |
| Glossary | p. 253 |
| Useful Websites | p. 263 |
| Bibliography | p. 265 |
| Index | p. 267 |
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