IT Outsourcing - Vendor Selection and Contracting

IT outsourcing is commonplace in modern IT. This course will teach you how to select the best vendor for your outsourcing project and how to set up a strong IT outsourcing contract.
Course info
Level
Beginner
Updated
Mar 26, 2018
Duration
1h 32m
Table of contents
Description
Course info
Level
Beginner
Updated
Mar 26, 2018
Duration
1h 32m
Description

Vendor selection and vendor contracting are outsourcing-specific activities that have a significant impact on the success rate of outsourcing projects. This course, IT Outsourcing - Vendor Selection and Contracting, covers important topics in these fields, which are unfamiliar terrain for most IT-project and team managers. First, you will discover the tools and techniques needed for setting up a long list of potential vendors for your project. Next, you will zoom in on the process of narrowing down your long list until you reach the most fit-for-purpose vendor. Finally, you will explore the various parts of an IT contract that are of interest to you as a project manager, and how you can use these clauses to steer the project to a successful outcome. After completing this course, you will have enough knowledge of the concepts involved in vendor selection and vendor contracts that you can execute these activities in your own projects.

About the author
About the author

Tommy van Schaik spent most of his academic and professional career as a linking pin between business and IT. His focus areas are: project management, IT governance, business processes, IT architecture, requirement engineering, and business rules.

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Section Introduction Transcripts
Section Introduction Transcripts

Course Overview
Hi everyone, and welcome to this course, IT Outsourcing and Vendor Contracting. My name is Tommy van Schaik, and I currently work for the Dutch government dealing with outsourcing projects and contract management. Selecting a vendor and taking a good look at the contract are vital parts of running a good outsourcing project. In this part of the process, a lot of risks associated with outsourcing can be mitigated and even eliminated. In this course, we will first take a deep dive into finding the right vendors and selecting the best vendor for your IT outsourcing project. Then we will zoom in on the outsourcing contract, looking at the areas that you as a project manager need to be aware of when the contract is set up. After this course, you will have the fundamental knowhow to manage vendor selection in your outsourcing projects, and you will be aware of the clauses that are important to you as a project manager in an IT outsourcing contract. This course is also part of the IT Outsourcing learning path, where we will take you through the entire process of preparing, starting, running, and closing an outsourcing initiative. Alright, so let's go ahead and get started on this course, IT Outsourcing - Vendor Selection and Contracting, here at Pluralsight.

The Vendor Selection Process
Alright, welcome back to this module. We will zoom in on the vendor selection process. The vendor selection process is an important step in an outsourcing project, as finding a vendor that is right for the specific problem you and your project are trying to solve, can be a real issue. Here, we will look at some of the common places you can look for potential vendors and how to select the right vendor or multiple vendors for your specific project. So how are we going to approach this module? Well, we will use the most logical chronological order. So first we'll look at how you should create a long list, places to look for a long list, and how you should use knockout criteria to select the proper vendors that are of interest to your specific project. Then we will look at the way you can narrow down the long list to a short list, leaving only the most promising vendors for further consideration. Then we will discuss the request for information procedure, where we engage directly with the vendors to gather more information. Then once we've got the short list complete, we'll look at some of the ways you can make sure you select the best vendor out of your short list so you can start negotiating with the best vendor for your project. Alright, so that's the plan. Let's get started on this module on vendor selection.

Outsourcing Contracts: Setting up the Main Transaction
Hi everybody, and welcome back. In this module, we are going to focus on the outsourcing contract. Most project managers I know try to stay away from the contract part of outsourcing, and rather leave that to the procurement office or the legal department. However, the contract, and especially the negotiation regarding the contract, is where you can mitigate a lot of the risks in an outsourcing deal, so it's very important that you as a project manager or team manager at least know where to look in a contract, and what areas to pay special attention to. And I promise we will look at this from a technical project manager viewpoint, so we'll try to stay away from the legal stuff as much as possible. So in this module, we are going to look at the main transaction that will be taking place in our contract, so this is basically the main deal you will be making. So we are going to divide that up into three parts. First we'll look at the contract basics, why do you need contracts, and why it's important to look at them as a project manager. After that, we'll take a look at the products and services that are usually included in an IT project. And then we'll look at the payment structure, as that is where a lot of the creativity in outsourcing deals takes places. The transaction and the payment are important to you as a project manager, as there is a lot to choose from, and very small choices in this part of the contract can have huge influence on the rest of the outsourcing project. So we have a lot of ground to cover. Let's get started, shall we?

Outsourcing Contracts: Specifying the Work or Service
Alright, so in this module we will be looking at how exactly you are going to specify the work the vendor is going to do for you in detail. Now, there are a few common ways this is done in an IT contract, and we're going to focus on the tips and tricks of getting good requirements. Writing good specifications is very important, as this is part of the contract that will be most difficult to negotiate, and it's like a magnet for legal trouble if you don't get it right. So, first, we're going to look at the service level agreement, which describes the service level you will be receiving from the vendor, and addressing things like uptime, and the speed at which faults to the system will be handled. Then we will look at technical specifications, how to properly write them, and how to handle situations where the tech specs might not be available in detail at the beginning of the contract. Then we will discuss the things to look out for when setting up a change procedure with the vendor, and how different parts of the contract require different change authorities within organizations. And finally, we'll focus on setting up a good schedule for receiving the products, but also, how to make good agreements on the way the products will be accepted by the customer organization. Alright, then, so let's get started on this module on specifying the work in detail.

Outsourcing Contracts: Minding the Security and Legal Details
Alright everyone, and welcome back. In this module, we're going to discuss security and legal details. Yes, I know, I promised to stay away from the legal stuff, but as a project manager, even IT project manager, we are going to have to take these parts of the project into account also. In this module, we're going to provide you with some of the useful clauses to look for as a project manager that you can use to steer the outsourcing project in the right direction. So first, we're going to discuss security and data, and how to make sure your data is protected, and also how it is managed and secured. Then we'll talk about termination and escrow, contracts tend to end either because the vendor delivered, in which case you should start considering new engagement or re-negotiation of your current contract, or it can end because of contract breach, bankruptcy, acquisition, and so on. We'll also discuss escrow clauses, and how they help mitigate some of these risks. And finally, we'll talk about negotiation. We're not going to tell you how to negotiate, as that is well outside the scope of this course, but we are going to provide you with pointers and information you need to successfully run a negotiation. Alright, so that's the plan. Let's get started on this module.