ENGIE

Transitioning to an outsourced service provider

Julie Sullivan, Director, KPMG Toronto Advisory Practice
Monday, January 20, 2014

What can a buyer organization do to smooth the transition to an outsourced service provider?

When a contract is finally signed at the end of a rigorous request for proposal (RFP) or vendor selection and due diligence process, the natural tendency is to believe that the hard work is over. Yet there is more effort required to ensure that a company realizes the anticipated benefits of its agreement.

The transition of work from an internal organization to an external provider — or from one provider to another — requires thought, planning and oversight. Some things to consider: whether it is a large complex transition or a relatively simple one, the first priority is to assure clarity of roles between the buyer and the service provider during transition. It is equally important to have a governance model in place to manage the work, deal with any issues and evaluate progress against defined milestones.

The biggest part of any transition is knowledge transfer. It is imperative to understand the details (what work will be shifting and when) and to recognize when the knowledge transfer has been achieved. In complex transitions, it is important to establish milestones and acceptance criteria for each milestone. This provides a controlled and defined path for transition, as well as clarity about when a task has been completed and by whom.

Thirdly, anticipate the potential impact of transition to the users of the services. Ensure communication plans are in place to let the users know what is changing and when, and share any anticipated process changes during the transition. It is key to have a clear and defined escalation path for users.

The old adage “the devil is in the details” is true when it comes to transition. Transparency is crucial throughout the transition process to ensure that all engaged parties are clear on roles and accountabilities. It also means that the transition activities are clearly mapped out with defined milestones. This way, should there be a bump in the road, everyone is prepared and knows what to do.

Julie Sullivan is a director in KPMG’s advisory practice in Toronto.

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