Sourcing Evaluation Life Cycle 1 Planning and Analysis

Sourcing Evaluation Life Cycle 1. Planning and Analysis Project Initiation Requirements Definition Baseline Determination Vendor Capabilities 2. Outsourcing Vendor Selection Sourcing Strategy RFP Development RFP Response Management Proposal Evaluation 3. Outsourcing Agreement Assessment Final Offers & Contract Negotiation Contract Management Contract Modification Competition Go/No Go decision points Alignment Discovery

Step 1 - Project Initiation Tasks • Introduce team and roles • Review project objectives and scope, including steering committee • Review project schedule • Determine support resources and facilities, including a project office • Develop an issue/risk log Tools and Techniques • Use a proven methodology and project plan Project Plan

Step 2 - Requirements Definition Tasks • Review project objectives and scope • Develop user and IT interview guide • Conduct interviews • Analyze special services requirements • Analyze special service level requirements Tools and Techniques • Interview guide • Workshop to validate business and IT drivers uncovered from interviews IT Interview Guide User Interview Guide. Gartner. Consulting

Step 3 - Base Line Determination Tasks • Model current and projected work volumes • Determine current and desired services levels • Compare current costs to marketplace Cost/Work Volumes Tools and Techniques • Basecase cost models • Service level templates • Benchmarking to understand current state Service Level Model

Step 4 - Vendor Candidates Tasks • Identify available outsourcing vendors • Determine vendor capabilities • Compare against company requirements • Select five vendor candidates Tools and Techniques • IT advisory and research • Structured reference checks

Step 5 - IT Assessment & Sourcing Strategy Tasks • Compare IT Organization, Management Processes, Costs, Architecture, to best practices • Assess IT’s support of business requirements • Conduct a Pro-forma findings workshop Organization • Develop a Final Report Co nt ia pl IT Services Assessment m m Co pl ia nt Tools and Techniques • Sourcing decision matrix Asset Change Configuration ia nt pl pli OPERATIONSant Problem Best Practice Compliance None IT Architecture 100% Low Low High Moderate Applications Development Low High Moderate Low High Moderate Applications Distributed Computing Outsource Low Voice Communications Help Desk Capacity Performance Disaster Risk Wide Area Data Networking High Maintenance Reduce Cost • Customer satisfaction survey C Elementom Potential Reduce Cost Add Value Enterprise Operations Costs C om • Rating tables Function Outsourced Low Moderate Partner High Moderate Contract Low High Insource Add Value Moderate High

Step 6 - RFP Development Tasks • Review RFP structure • Define In-Scope IT Services • Incorporate Work Volumes and Service Levels from Base Case • Review and revise Roles and Responsibilities Tools & Techniques • Proven RFP templates • Iterative revision process • Quality control all numbers stated in RFP Request for Proposal • Identify transfer of assets from company or current outsourcer Union Gas Desktop Services RFP # 08 -15 -98 August 15, 1998 © 1998 Gartner Group, Inc. All rights reserved. Union Gas—CONFIDENTIAL Use Pursuant to Client Instructions

Step 7 - RFP Response Management Tasks • Conduct vendor conference • Establish point of contact for vendor RFP questions • Establish internal experts for vendor questions • Track and respond to vendor questions • Update Issues/Risk log • Develop a scoring evaluation model Response Memo Tools & Techniques • Establish a response process • Policies during response period • Workshop to revise an evaluation model template To: From: Re: Date: Vendor XYZ Union Gas Question 1234 dd/mm/yy The following is a response to your question regarding work volumes for years 3 -7.

Step 8 - Proposal Evaluation Tasks • Assign vendor proposal sections to evaluation team experts • Review proposals with a focus on risks • Include a Q&A session during vendor proposal presentations • Update issues/risk log and summarize for project sponsor • Select two finalists based on final ratings Tools & Techniques • Weighted evaluation model that reflects the business and IT requirements and objectives • Focus on the transition phase(s) for risk transfer Vendor Evaluation Model

Step 9 - Finalist Offer & Contract Negotiations Tasks • Invite two vendor finalists for final offer and negotiations • Conduct due diligence • Develop “going-in” contract terms and conditions • Develop statements of work schedules • Develop pricing schedule • Develop new internal IT management organization Tools & Techniques • Negotiation strategy • Pricing schedule reflecting class of service and quality of service • Proven contract templates from experts Statement of Work

Step 10 - Contract Management Tasks • Review service levels for support of business requirements, including customer satisfaction surveys • Assess penalties consistently • Review technical architecture and standards Tools & Techniques • Service level reports with root cause analysis on recurring defects • Audits

Step 11 - Contract Modification Tasks • Benchmark pricing against market rates • Compare contract terms and conditions against current best practices • Recommend changes to Steering Committee • Implement contract changes through a change control process stated in the contract Tools & Techniques • External benchmarking studies • Contract comparison against best practices Contract Pricing v Market Rates