The market for IT services has changed in recent years. In this context, the drivers were and still are cloud services, which make up an increasingly large proportion of IT operating models. This goes hand in hand with increasing standardization of service provision on the part of service providers as well as standardization at product level with the aim of increasing operational reliability and interoperability. Providers are increasingly reluctant to offer customer-specific deviations from these established standards.

At the same time, HDP is observing that the market situation is shifting towards the providers, which is not least reflected in the increasingly selective participation of the providers in tenders. In other words, if, for example, anticipated contract volumes are small or the specification of services are not in line with the typical delivery models, it may be difficult to find suitable service providers. Classic tendering models, in which detailed service specifications or statements of work are put out for tender based on the specifications of the client and which force the providers into a tight corset when performing the service, are therefore no longer suitable under the circumstances described.

This is why HDP offers - in addition to the “classic” requirement-based sourcing - a market-oriented model of sourcing.

The market-based sourcing is characterized by:

• The definition of requirements for services to be provided instead of statements of work or detailed RACI matrices.
• The implementation of provider workshops in which possible solution concepts, advisory quality and the ability to innovate as well as communication skills are evaluated.
• The preparation of the tender documents based on the discussions in the provider workshops.
• The selection of the tender participants based on their aptitude demonstrated in the workshops
• Orientation towards standards, including the use of service providers' statements of work.

In particular, through the early involvement in the sourcing process, the service providers are directly integrated into the process of service definition, which offers several benefits:

• Clients benefit from standardized delivery models and innovations from service providers.
• Clients can evaluate client orientation and cooperation with the service providers very early in the sourcing process.
• A significantly higher level of acceptance and willingness to submit an offer is generated on the provider’s side.
• The service providers can point out the differences to the competition much more strongly.
• Clients can participate in the economies of scale of the service providers via the standardized delivery models, which results in reduced costs in outsourcing.

In order to actually realize the potential and benefits of the market-based sourcing, a systematic and stringent approach is required, flanked by a continuous project management that controls the cooperation of the project participants and also involves the relevant stakeholders outside of the project.

• Service requirements and prerequisites

At the outset, the requirements for future services are defined together with the client. The defined requirements reflect the needs from the business as well as from IT itself.

As a result, the framework for the sourcing project is completed, which comprises in particular an adopted sourcing strategy, a rough target picture (FMO) and requirements for future IT services.

A central element of the innovative market-based sourcing is the careful provider identification and integration. This takes place very early in the sourcing process. Essential for this phase are provider workshops, in which the possible solution concepts that the providers have drafted based on the requirements provided are discussed. The result of the provider workshops is a common understanding between the client and the providers, a specified target picture, sharpened requirements and validated service descriptions. In this way, gross deviations between the specifications of the client and the offers of the providers can be significantly reduced.

The prerequisite for the success of the workshops and maximum benefit, especially for the client, is a targeted pre-selection of suitable service providers. With its extensive market knowledge, HDP can provide valuable support to narrow down the group of companies in question. HDP can draw on  an extensive amount of information on providers in its own database, which contains general information about the providers (such as certifications, partnerships / networks / alliances, dedicated contacts) and information about their services (standard services, USPs etc.) as well as well documented experiences of HDP with the providers

Once the new services have been defined and the service providers have been identified, the phase of the transformation and, if the service providers change, a transition begins.

From many years of experience and many such projects, HDP knows the pitfalls of this phase very well and can help its clients sustainably with the successful implementation.

In doing so, we make sure that natural conflicting goals between the expectations of our clients (higher service quality, flexibility and minimization of costs) on the one hand and the service provider (standardization, economies of scale) on the other hand are considered and resolved throughout the transition and transformation projects.

We are not only available to our clients in an advisory and controlling manner. On request, we can also take on practical tasks in the service organization or the provider management to drive the operational transformation forward.

The success of the transition and transformation essentially depends on active risk and quality management. From the start, HDP supports the entire route to the goal using proven procedures and practical tools, especially on the individual stages in everyday project work.

The basis for identifying potential risks is transparency about the initial situation, contractual agreements with the providers and the defined target picture, which is systematically generated with the help of HDP frameworks. Once the risks have been identified, tailored, appropriate mitigation measures are defined and their implementation actively promoted together with all those involved.

The active implementation of risk and quality management is usually embedded in the project-specific program or project management framework. In addition to the defined types of results, the focus is placed on the risks and qualities of procedures in the project itself as well as the necessary measures for change and communication management to involve the relevant stakeholders.

The practical implementation is based on sound methods, such as ISO 31000 Risk Management, DIN SPEC 1041, PRINCE2^® and ITIL^®.

The implementation is supported by HDP employees who have many years of experience in management and consulting.

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