2. About us…
Affärsadvokaterna
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Lawyer at Wistrand, Linklaters and IT-Advokaterna
Legal counsel at Swedish Railways (SJ) and Hewlett Packard
Broad experience from complex and business-critical agreements and transactions
Representing clients in a large number of dispute resolutions
Chambers in 2013 is ranking Mattias Lindberg as a Leading Individual in his field since he
is singled out for his deep understanding of the sector
3gamma
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We are an independent consultancy firm specializing in IT management
We offer practical, results-oriented advisory and consulting services based on significant IS/IT
experience
We assist organizations through the entire IT sourcing life-cycle, enhancing IT effectiveness
and improving operational efficiency
We are 100 consultants in Stockholm, Gothenburg, Malmo, Manchester, Helsinki, New Jersey
and Bangalore
3. Vendor base flexibility – why is the topic on the agenda?
Development of the outsourcing
landscape
• Outsourcing maturity – but still a growing
market (2nd and 3rd wave of outsourcing)
• Business drivers – from cost focus to value for
money (innovation, time to market, capabilities)
• From single-sourcing to multi-sourcing
• Shorter contract periods
• Shift of ”what” and ”how” – asset-light (cloud
services) consumption , effect based delivery
models, end-to-end service integration
• Insourcing…
4. Vendor base flexibility – why is the topic on the agenda?
Companies are not satisfied with the
delivered services
• Costs higher than expected – eroding business
case
• Limited vendor ability and contract support for
effect based delivery
• Quality of delivery not satisfactory – dispute
over SLAs and penalty charges
• Underestimating the effort to manage vendors
and to build a retained organization with the
right capabilities
…but still many companies choose to renew contracts with existing vendors
5. Why is it difficult to shift vendor?
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Not considering the entire outsourcing life-cycle;
primarily focus on contractual aspects and exit
strategy in contract
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Lock-in effects built in when developing the
sourcing strategy (processes, tools, architecture
and integration, capabilities/people) making it
difficult to shift vendor
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Lack of capability and capacity to manage vendor
in run phase to avoid and limit potential lock-in
effects
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Limited experience of how to shift vendor – how
to do it, without disrupting business operations
The business risk – Stuck with a vendor not delivering the right service, at the right
quality and at the right cost
6. Strategies for creating vendor base flexibility (1/2)
• Adopt an end-to-end and multi-disciplinary
mindset and approach - considering entire
outsourcing life cycle, combining Business/IT
and legal outsourcing expertise
o Sourcing strategy (how you define and
cluster sourcing objects, architecture and
integration considerations)
o Outsourcing contract – exit strategy
o In-contract, before renewal of contract –
vendor shift readiness assessment
7. Strategies for creating vendor base flexibility (2/2)
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Regularly assess internal “vendor shift readiness”
o Risks
o Lock-in mechanisms (processes, architecture,
integration, tools etc.)
o Contract
o Change effort
o External market capability
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Actively manage your vendor base (as opposed to
the other way around) and be be aware of
potential lock-in effects and how to limit them
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Develop and maintain execution capability –
ability to transfer services from one vendor to
another vendor (or insource)
8. Service integration in a multi-sourcing environment – different
options for creating flexibility and control
Type 1. Retained integrator
”Client responsible for service integration”
Type 2. Third party
”Integration is delegated to a third party”
Type 3. Guardian vendor
”Single vendor responsible for service integration”
Type 4. Prime contractor
”Single vendor accountable for all services”
