Sourcing’s Five Critical Governance Processes

In this blog, I provide you with the next layer of detail for implementing the best practice sourcing governance framework. For commercial reasons, I will only focus on five processes that are crucial for outsourcing success. Whilst these five processes are critical, there are a number of additional governance processes that you will need to implement effectively for a successful outsourcing relationship.

The five processes appear in my e-book on the Science of Sourcing Governance. This means, that if you implement these processes, your sourcing relationship will materially improve and you can focus on adding more value and/or improving other aspects of your sourcing relationship.

The five core governance processes are:

 1.  Contract Management: This process allows the service provider and the customer to interpret, upgrade, administer, modify and respond to queries about the Contract. The process also covers how changes to the Contract are requested, tracked and agreed.

2.  Issues Management: This process allows the customer and service provider to continually and consistently identify, track, manage and resolve issues raised by either party.

3.  Service Level Management: This process defines how to measure and report the performance of Services against the agreed SLAs.

4.  Invoice Management: This process defines how and when the service provider will provide billing information to the customer and, how to ensure the accurate and timely billing and payment for the Services provided.

5.  Service Request Management. The process that establishes how the customer and the service provider will manage service requests that fall outside of Incident Management.

Please note that the processes listed above are not in order of priority or importance. The relative importance of these processes is dependent upon the type and complexity of the deal, and the maturity of the service provider and customer. What is important is that the above five governance processes are critical to ensuring success in all outsourcing relationships. Therefore, if you are going to implement a governance framework, then these processes must be executed efficaciously.

The table below details the key elements of the five essential processes (compliant with ISO 9001:2008).  The table is split into two for ease of display.

Please note that in order to ensure effective sourcing governance you will need to augment the above critical five processes with others that are appropriate for your particular sourcing relationship and life-cycle.

If you need help identifying the other sourcing governance processes, or have questions regarding this e-book, please contact me.

I would appreciate your comments and feedback.

About the Author

Ernie Zibert is a senior IT sourcing professional and brings 20+ years international management experience across government, communications and media, and finance industries. His transferable skills include IT sourcing strategy and governance, and financial, relationship and commercial management of external service providers. Annual spend under management includes up to $200M AUD along with 20% savings.

Other eBooks by Ernie Zibert

Discover other titles by Ernie Zibert at Smashwords.com.

The Science of Sourcing Governance

What’s the difference between a million and a billion dollar IT sourcing deal?

Ordering IT Services: Would you like CHIPS with that?

Sourcing's Three Fates

The IT Outsourcing RFP COW is too FAT

Outsourcing’s Two Evils

Impotence and Sourcing Governance

AMS – The next stage in the evolution of IT outsourcing

Apply CREAMS to your IT sourcing pain

  

For more information, contact Ernie Zibert at ernie.zibert@gmail.com

Thanks go to Mohandass Ayyappath for his insightful comments and editing.