The actions that can be taken at a strategic level to start the process of developing appropriate service level agreements are described below. The first actions take place before an outsourcer is approached.

As an example, I plan to outsource my IT function, including all current mainframes, servers, workstations and PCs. New developments will also be undertaken by the outsourcer.

Define the reasons

Reaching a definition of the reasons for outsourcing is a consultative process.

Examine your reasons for outsourcing to ensure that they are valid and sustainable.
Develop a firm list of reasons for outsourcing.

For my outsourcing project, my reasons are

1. to concentrate on the core business
2. to have access to world-class capabilities
3. to have access to resources not available internally.

   Define the services

   The services that you require must be associated with the reasons for outsourcing.
   

   • Consider what it is that the outsourcer will need to provide.
   • Associate each service with one or more of your list of reasons.
   • Where a service does not match a reason, consider whether to reject the service or to add another reason.
   • Do this in consultation.

   The services that I require from my outsourcer are

   1. to provide all information technology and services, freeing me to concentrate on the core business
   2. to provide recommendations for improvements to IS, through the use of world-class capabilities and specialist resources
   3. to provide all new systems developments and enhancements, supporting the core business through use of the outsourcer's resources.

   Describe the expected quality

   For each of the services required, you must specify the quality required.
   
   If one of your reasons was improvement (of your organization's focus, resource usage, capital expenditure or operating costs), you should consider stating the required quality in terms of an amount of improvement over a period of time. The amount of improvement may be in absolute terms or expressed as a percentage.
   

   • Consider all of the qualities that the service will be expected to provide.
   • List all the qualities, and provide amounts and timings for improvements where appropriate.

   My quality measures will be

   1. all current information technology and services will be provided within six months
   2. recommendations for future information technology and services will be provided on an ongoing basis, with a review each month
   3. all future developments and enhancements will be provided on a basis of proven, current methods and techniques
   4. all future developments and enhancements will provide support to the core business, and will provide world-class capability

   Analyze the constraints

   You will need to list and analyze the constraints of the achievement of quality service.
   
   Some the constraints that you will need to examine are
   

   • level of management involvement
   • formal and informal reporting structures
   • execution, monitoring and decision-making structures
   • information content and flows
   • impacts on other processes and tasks
   • impacts on other business units.

   In my organization, the constraints are

   1. The finance director is sponsoring the outsourcing project, and will be focused on cost reduction rather than enhanced service quality.
   2. Current reporting on development projects is highly formalized and frequent.
   3. Current reporting on computer operations and support is informal and infrequent.
   4. The IS manager is only nominally a decision-maker; the financial director makes all decisions.
   5. Current management reporting tends to be by the systems presenting data for use in spreadsheets; we believe that an executive information system would be more useful.
   6. None of the applications is critical to the business. Our only danger would be in our inability to produce customer invoices on time, and we could probably do that manually.
   7. The systems in our production and planning departments will not be outsourced.

   Acquire an outsourcer

   Given that you will be able to provide and discuss your reasons for outsourcing, the services you will expect, the quality of those services, and any constraints, you will be able to begin acquiring an outsourcer.
   
   Together with two outsourcers, you should discuss these items and then allow them free access to your organization so that they can prepare a precise specification of the services that will provide, the quality slightcyandards they will meet and how those slightcyandards will satisfy your requirements.
   
   During these discussions, some other issues will emerge.
   

   • The reasons for outsourcing must remain as "strategic objectives" for the outsourcer.
   • The services required must remain as "strategic functions" for the outsourcer.
   • The quality of service must remain as "critical success factors" for the outsourcer.
   • Document all meetings. Both parties must confirm the specifications and agreements reached during these meetings.
   • Grant the outsourcer full access to staff, their tasks and the outputs from those tasks. The granting of access must not depend on whether you believe that it is relevant; the outsourcer has a responsibility to be satisfied that you will receive the best service that they can provide.
   
   
   The opinions expressed are solely those of David Blakey.
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