Transitioning Managed Services – A few practical thoughts – Organisation

In our last post, we looked at the various dimensions a transition manager should keep track of during the transition of managed services from one organisation to another (or from a client organisation to a vendor organisation). We also looked at the first dimension – the services to be transitioned – in detail. In this post we will look at another of the dimensions – the organisation you are transitioning to.

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Dimension 2 – The organisation you are transitioning to

Before you select the organisation you are going to transition to, you need to do a proper due diligence on the organisation. Of course, your legal and finance departments will do the required legal due diligence – the organisation’s solvency, their compliance to laws and regulations etc. etc. But as the CIO / program manager you need to do more to ensure that when your services are transitioned to this organisation they will work for the better – not worse. You need to look at the following carefully: 1. Their maturity level Does the new organisation have the maturity level and the processes to reach your level requirements? You are doing this transition to make things better not worse. Maturity can be defined as (as per Deloitte) “the level of organization’s readiness and experience in relation to people, processes, technologies and consistent measurement practices.” The Software Engineering Institute defines a five level maturity model – initial (chaotic), repeatable, defined, managed and optimising. Any organisation you go with should be at least at the “managed” level or equivalent in other models. That is, using process metrics, their management can effectively control the AS-IS process (e.g., for software development). In particular, management can identify ways to adjust and adapt the process to particular projects without measurable losses of quality or deviations from specifications”

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While you find the many of the world’s top organisations (especially the new high-technology product organisations) do not have any formal priceless certificates, you find that they are quite the sticklers for quality in their work. However, service organisations need to certifiably well-structured as far as process are concerned. The way you can check on their maturity level is to look at formal certificates, if they have any, or inspect their processes to satisfy yourselves that the right issues have been addressed. Their governance structure, their quality processes, escalation processes, decision cycles, their KPI monitoring systems, their support processes, their history of dealing with other organisations; all these need to be looked at verified by you. If the organisation is not at a high maturity level you will find the services they provide will vary erratically in quality. This will present nightmarish scenarios for you and your management. 2. Their openness to TUPE or equivalent Many countries have legal requirements that need to be complied with for the protection of the employees of the organisation whose business is being transferred to another organisation.  In the UK, for instance, this requirement is covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006, called TUPE for short. Compliance to this law may need the new organisation taking on the employees who were working on the transferred service in the old organisation without substantially affecting their terms and conditions. Of course, there are certain mitigating factors that are mentioned in the regulations and you can use those if the conditions apply to you. These need to be discussed and agreed to up-front so that there are no misunderstandings later or any risk of infringement of laws. 3. Their domain knowledge, skill levels and bandwidth As the CIO / program manager you are obliged to ensure that the new organisation is technically capable of handling the work that will be transferred to them. There are three areas you should look at: domain knowledge, skill levels and bandwidth (that is, required number of staff having the required skills to be deployed on this assignment). It is important that the new organisation has done similar work before and has acquired the required knowledge in the business area the transferred services belong to. Otherwise, it will be difficult for them to engage in meaningful discussions with you and your users. Of course, we don’t have to stress the importance of the organisation’ engineers to have the required technological and technical skills. They should also have the required number of staff. You should also ensure that the organisation gives you assurances that people of the right skills are deployed on your project. The other area you need to make sure is that individuals are rotated out of your project only after a specified time (like say eighteen months) 4. Their depth of management skills You need to get a clear idea of the depth and breadth of their management skills. Does their project / program manager have what it takes to run your systems? Does he have adequate support from his top management? Do they have the right people to serve on the Project / Program Governance Board to run your system?

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I have found that many organisations have excellent engineers and a very efficient person at the top, but really no good middle management. You should be wary of such organisations. In these situations you will find that the engineers who are working hard get frustrated because the management does to deliver to their expectations. This will in turn affect the quality of their delivery. 5. Infrastructure One of the key things you need to look out for is whether they have the right infrastructure to run your systems. This refers not only to the IT infrastructure, but also the infrastructure to implement any legal requirements like data and information security needs. You have to make sure that they gave all the required licenses to run the software and hardware that is needed for your systems. You will find that in some cases the organisation will ask you to buy the license for their use. This should be avoided at all costs. You are going to them to get rid of some of the mundane responsibilities from your plate. They should take full responsibility. 6. Their scalability Having considered all the above you need to make sure that these situations are scalable. If you feel that your business is going to expand and there may be corresponding increase in the services managed by the new organisation, you have to decide whether they will be able to scale up to your requirements. Many organisations are good as is, but ask them to scale up and they crumble. The above six are some of the key things that you should look for as the CIO / program manager in the organisation that you are thinking of transitioning your services to.

In the next post in this series we will look at knowledge management and transfer.

What do you think?

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