One lesson learned, in ensuring effective service levels for all, was to engage the appropriate business and technical people in all business divisions relevant to the outsourcing agreement, and to do so from the outset, Taylor says.
Companies should also define specific service levels at a micro level. "Representatives of the client receiving the services from the service provider [should] work closely with the service provider's representatives to define specific service levels that are relevant for each business division," and that address each service the client and its individual business units would receive, Taylor says.
In addition, penalties and incentives should be meaningful. "The penalties should incentivize the service provider to meet its obligations," Taylor says. Another way to address this issue is to provide bonuses or financial incentives for performance in excess of service-level metrics, he says.
When public relations firm DPR Group hired an IT services provider in 2011, it experienced system latency, slow customer service, and problem tickets submitted daily.
"This constant break-fix model resulted in increased downtime and [decreases] in productivity that hurt our business," says Dan Demaree, president and CEO. "When we submitted a trouble ticket, it would sometimes take days to hear from the technicians, resulting in lost productivity, downtime, and unnecessary time spent on IT maintenance."
The service provider claimed to have a systematic approach, but the lack of a naming convention for DPR's computers and the fact that many of the people working on its systems were not familiar with them belied that assertion.
"We would have to start from scratch each time we experienced an issue," Demaree says. "Beyond the technical challenges, documents were irretrievably lost, creating significant rework, and our ability to service and respond to our clients was being interrupted."
DPR was spending too much time and money on an IT outsourcing model that was unreliable and even detrimental to the well-being of the business, he says. To avoid these issues, the firm searched for a proven cloud services provider to handle its IT.
"Since we've moved to the cloud, we've had increased productivity, flexibility, and accessibility, and no downtime," Demaree says. "Our advice would be to do your research before looking into outsourcing your IT. Look at their track record, security, accessibility, and budgeting. Our current cloud provider has a history of zero downtime."
Sign up for CIO Asia eNewsletters.