Improved Operational Performance Through Strategic Outsourcing of Voice and Data Services

1. Background The client, a large healthcare provider in a major metropolitan area in the US, determined that to improve their operational performance a strategic outsourcing of voice and data services needed be considered. While a critical part of their operation, the voice and data services was fast becoming a burden to operate with their own staff. Since these services were not one of their core competencies, they sought help to determine the appropriate approach for such an outsourcing of strategic services. SPG’s Consulting Assignment SPG was engaged by the client to determine an appropriate outsourcing process, to find a qualified outsourcer, and to work together with the potential outsourcer in conducting a due diligence of the voice and data operation SPG - Business Analysis Findings SPG, through an existing working relationship with a telecom outsourcer, conducted a Business Analysis that forged a strong relationship between the client and the outsourcer, but also implemented a due diligence of the voice and data services operation. The SPG Business Analysis revealed opportunities to: Improve Operating/Service Level Agreements by ensuring contract accuracy, implementing measures/tracking mechanisms, and formalizing interfaces among affected entities. Improve IT security by incorporating network policies, implementing intrusion detection methods, and reinforcing firewall support. Implement change controls for network and voice specific functions including tracking mechanisms for accountability. Strengthen asset management by updating the asset database and ensure appropriate maintenance by Help Desk personnel. Implement Disaster Recovery for data and voice services at all sites (in/outside buildings). Implement operational procedures for account/ special project management, training and certification plans, and networking support. Redesign key processes with clearly defined roles and responsibilities, and a comprehensive system for managing. Results and Quantitative Benefits The combined efforts of SPG consultants, client and outsourcer professionals achieved: An agreement for a five-year outsourcing contract of voice and data services including a complete transfer of hardware, software, contracts, and personnel to the outsourcer. A significant cost reduction impact for the healthcare provider of over $1 million annually and over $6 million projected for the five-year contract period. A significant improvement in operating and service levels for the voice and data services provided to the healthcare provider A solid working relationship between the healthcare provider and the outsourcer which resulting in additional future outsourcing opportunities. To achieve such operational impacts for the healthcare provider, the project team: Played a key role in managing the data center at the healthcare provider that ensured a smooth and successful transition to the outsourcer. Worked with the outsourcing to implement their policies, procedures and processes at the healthcare provider including the redefinition of roles and responsibilities for the transferred personnel. Leveraged the existing outsourcer’s system for managing including critical reports, and fine tuned them for utilization in the healthcare provider organization. Initiated a renegotiation of all current vendor contracts and leveraged the outsourcer’s national contracting process and existing contracts with large vendors. Improved Operational Performance ThroughStrategic Outsourcing of Voice and Data Services • Schrudder Performance Group, Inc. Proprietary Information - 2002