Outsourcing Governance

Project Background

The client was a major U.S. bank that was growing rapidly through mergers and acquisitions Two years before, before the major M&A activity began, the client bank had entered into a five-year outsourcing agreement for voice telecommunications services. The outsourced services included telecommunications design and engineering; system implementation and maintenance; telecommunications moves, adds and changes (MACs) and projects; and telecommunications fault management, including break/fix support and help desk. The original agreement included support for all retail and administrative organizations in the states in which this bank operated, but had since been enlarged to cover banking organizations in other states which are now part of the client company.

Problem Summary

The client’s goal was to establish a more effective support model for management of its voice telecommunications services. Since the inception of the outsourcing agreement with their service provider, the workload had grown and the company had gone through substantial restructuring. The client’s Program Office, established to manage telecommunications service delivery, had current goals to improve management of standards, expenses and service quality. As part of this initiative, they wished to investigate and implement “relevant best practices” with regard to service level management and Program Office structure and process.

In the area of service level management, the bank’s intent was to renegotiate its agreement with its provider of voice telecommunications managed services, focusing on measurable units of work and effectiveness. Assistance was sought in defining more appropriate metrics for use in monitoring and evaluating customer services.

In the area of relationship management, the bank’s goal was to restructure the Program Office, implementing processes and adding appropriate employee skill sets to enable development of greater understanding of customer service needs and business strategies, determination and implementation of needed standards, and improved service delivery quality assurance. Another specific objective was to increase the focus on the management of telecommunications suppliers. The voice telecommunications managed services contract represented less than 6% of the total voice communication carriers/vendors’ services costs per year, but could have major negative or positive impact on the bank operations and costs since the vendor held responsibility for helping the bank to manage services provided by the rest of the vendors.

TBI’s Approach

TBI reviewed the current statement of scope of outsourced services, and interviewed bank Program Office management as well as service provider management to gather and analyze information on needed revisions and clarifications in service scope. A Statement of Work and Service Level Agreement were prepared by TBI for use in the contract renegotiation and as a foundation for the remainder of the consulting engagement.

Service level metrics and standards were developed and recommended for each area of service, focusing on quality, availability, timeliness, and customer satisfaction. Information was drawn from TBI’s Service Level Metrics Benchmarking Database in order to provide the bank with suggestions of industry “best practices” in voice communications service delivery. TBI consultants worked with the client’s Program Office staff to draft service level metrics specifications for discussion/negotiation with the vendor. They also reviewed the client’s customer satisfaction survey process and made recommendations for its improvement.

To accomplish the needed Program Office Restructuring, TBI undertook a full study of current operations, interviewing each staff member with regard to current work activities, challenges, process improvement needs, staffing needs and short term career goals. A gap analysis was performed, contrasting current Program Office operations with organizational goals and industry best practices. Recommendations were developed for organizational restructuring to improve vendor relationship management, customer care management, and product/service development. TBI also conducted a task analysis for the new jobs to be established, using senior management as “subject matter experts” to define competency requirements for these.

Successful Business Solutions

The client received an updated Statement of Work and Service Level Agreement for use in contract renegotiation with the bank’s vendor for voice telecommunications managed services. These provided the foundation for improved management of the vendor relationship, with clarified roles and responsibilities and service requirements.

A Program Management Office model was also developed for the client, focused on vendor relationship management, customer care management, and product/service development. Deliverable’s included functional and individual job descriptions, defined reporting relationships, suggested corporate job classifications, and competency requirements for each new job. In addition, the client received a phased implementation plan, with steps detailed to accomplish core staffing in three months and full transition to the new organizational structure in five month’s time.

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