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How Going Digital Can Streamline the Multi-Provider Ecosystem

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by Kirsten Buffo de Jong August 2, 2016
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The days are long gone when Fortune 3000 companies worked for two years to develop their sourcing strategies, design their service models and prepare for transactions with their strategic providers. In today’s market, enterprises must move more quickly and nimbly. This means signing outsourcing engagements that are shorter and narrower in scope. And shorter, more specialized contracts mean more of them.

Against this shifting backdrop, most enterprises have not changed how they manage their provider ecosystem. Many are still building internal processes themselves using Excel spreadsheets and email.

The latest developments in digitalization make it possible to dramatically simplify provider management throughout the lifecycle of an outsourcing contract. Automating crucial parts of the process can decrease the time needed to prepare for and negotiate a sourcing contract. And, once a relationship is underway, ongoing, fact-based evaluation of provider performance allows a company to focus on the relationship itself instead of the execution of bespoke, internal Excel and mail-based processes.

This game-changing approach is called Digital Contract Lifecycle Management. When contracts are digitalized, they are moved from paper into digital contract management libraries, where stakeholders can collaboratively author and manage documents. This way, delivery units and involved organizations have easy access to the contract and can focus on the specific components for which they are responsible.

Digital Contract Lifecycle Management tracks performance credits, calculates earn-backs and verifies invoices against contracted deliverables and obligations. With this kind of collaborative system in place, governance bodies from the bottom up can share standard processes to track, manage and analyze actions, decisions, escalations and risks. Meeting minutes are stored centrally, making information available for audits and evaluation. Contract change requests, interpretations, issues and disputes are logged into the system to enable workflows that feed enterprise-to-enterprise communication and decision making. Frequently-asked-question databases store information for future use.

A digital contract also digitalizes and monitors service levels agreements (SLAs) and operating level agreements (OLAs) between the business, IT and providers. Running analytics across the contract lifecycle shines a light on ongoing performance so companies can see what is working, what is not, when to prolong a contract or when to disengage.

In today’s competitive market, multi-sourcing offers many advantages. But managing all the moving parts of the multi-sourced environment to make sure you get the most out of each individual contract is a challenge. ISG helps enterprises manage the lifecycle of their contracts by helping them go digital. Learn more about how ISG helps enterprises with digital vendor management or contact me directly to discuss further.

About the author

Kirsten has more than 20 years of experience helping organizations manage their multi-sourcing environments, define their governance structures, plan their sourcing strategies and design and implement transformation projects. She has worked across the globe in complex national and international multi-vendor environments with both large and medium-sized enterprises. Kirsten has developed intellectual property and standards for Service Integration and Management, Supplier Management, Vendor Management and Collaborative Governance Frameworks that are used in the industry today. She is respected for her extensive experience within the areas of IT governance, multi-supplier integration, IT strategy, performance management and business intelligence.

Meet the Team

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Kirsten Buffo de Jong

Director

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Anubhav Saxena

Partner and President, Global Managed Services, Research and India Operations

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Tanja Kruse-Jones

Principal Consultant

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David England

Director

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