At the Head of the Table: Service Portfolio Governance

Many companies will conduct a second or third renewal of an outsourcing contract in 2014 and, in doing so, will need to revisit their sourcing strategy to seek best-in-class providers. Solid and effective portfolio governance is essential to orchestrate the integration of those often separate, piecemeal and less integrated services. The ISG Top 5 points out ways a business might dramatically improve its service portfolio governance for multi-technology, multi-service provider sourcing.

1. Configure a top-notch portfolio governance team. In the past, most outsourcing deals were a lengthy process from RFI to RFP and a final negotiation phase with one service provider. Now corporations are choosing to insource some critical competencies and renew outsourcing contracts with multiple service providers for less critical competencies. It is not uncommon for the senior management team to find itself, in the span of a week, scoping for RFPs, signing contracts, participating in governance meetings and contributing to innovation boards with different providers in differing cultures and varying approaches to innovation. The portfolio governance team must effectively manage its IT sourcing strategies and roll-outs and know how to allocate the right resources on the right schedules.

2. Keep an eye on technology trends. Evolving scope of RFPs may bring an increased diversity in requests of services, from managed infrastructure to application environments, BYOD services, cloud devices and ERPs. Outsourcing may be preferred not only to reduce cost and increase capability but also to take advantage of providers’ competencies and ability to position their services to your company. In this rapidly evolving environment, corporations must retain the technology architecture decisions and keep themselves abreast of technology trends. A solid portfolio governance strategy will help to select and prioritize the right mix of technologies, services and providers.

3. Orchestrate effective transition and transformation with multiple players. Transition and operational go-live phases will be different with each provider. The acceptance of deliverables may be from one provider to another provider where corporations will need to intervene to sign-off deliverables, control obligations and organize acceptance of services. ISG has found that, even when corporations attempt to consolidate initiatives and RFPs, companies need to professionally implement a portfolio process to govern and manage the large array of such programs.

4. Integrate services. The IT department is responsible to the business partners and must report on service level agreements, key performance indicators, cost, service efficiency and customer satisfaction. Ensure a solid ITIL process environment with end-to-end service integration so that you can manage and measure corporate services and orchestrate strategic service providers. IT portfolio governance helps to insure that no initiative is spinning by itself in a non-value-add context and that all services are aligned, measured and managed for optimal performance.

5. Synch your service portfolio to your corporate goals. While IT organizations have to continually juggle and manage providers, they must also be able to demonstrate strong on-going value to their organizations with a global governance roadmap that spans programs and projects. Make portfolio governance components quantifiable so that you know where the projects, program status and priorities sit on the path toward your target operating model and how they contribute to corporate business objectives.

ISG can help structure your portfolio governance throughout the sourcing and operational life of service management so that you can efficiently and competitively select, prioritize and monitor programs and projects within your IT portfolio. Contact us to discuss further.