Not everything in life is black or white Managing Consultant David J. Window AMBCI/CIPS Continuity Ltd Company Registered Number:

Continuity of Supply Just as Business Continuity is anchored to business objectives and goals so is outsourcing. An outsourced service provider as a strategic partner should share the objectives and goals of the business It follows therefore that if business continuity plans are developed to lessen the impact of disruptive events involving urgent activities then outsourced service providers must match their objectives and their own plans to that of the client

What is a strategic supplier? Their presence and performance is key to achieving your company business objectives Usually therefore involve a long term relationship Requires top management buy in and support between partner top management Their investment plans, financial status, business continuity plans should align to yours You need to be seen as core to their growth strategy

What to consider when outsourcing activities Decide who is best geared to fund the service you or the outsourced partner? How technically diverse is the service? Who has the competence? Do you have the same values, objectives are they at odds contractually? When you choose the outsource partner, investment is required in supplier relationship management, are resources and budget available? If you are constantly in combat with your service provider stressing their business model will tear apart the relationship, think about the need for good contract management

Procurement Analysis Examine the strategic importance of the service to the business Assess the market, can it provide the service you need Assess the vendors is there a vendor that meets your strategic need Analyse the risks, can you insert mitigation strategy now Ensure business continuity plans exist and are appropriate for your business

Do mitigation strategies increase costs or add value? Multiple vendors/multiple chains Buffer stocks Contingency stocks Strategic stocks On shore/off shore or both? Manufacture or outsource? Just in case or just in time?

Procurements role with the outsourced supplier You should not be in a tug of war with the outsourced supplier They are a strategic partner and procurements role starts with helping the executive make the decision to outsource They may undertake a pilot scheme and report on the outcome They will derive the contract terms and conditions and SLA’s They should provide post award contract management

Raw water treatment Waste water treatment Maintenance of the underground network Supply chain services Logistics Financial services Audit Asset management Engineering Media Communications Human Resources Call Centre Management Information Technology and Communications Facilities Management

Maintenance of the underground network Supply chain services Logistics Audit (partial) Asset management Human Resources (partial) Engineering Call Centre Management Information Technology and Communications Facilities Management

Which have been insourced again? Engineering Call Centre Management Information Technology and Communications Supply chain services Asset management

Need identified Need specified Tender launched Contract won Contract management Variations Contract award BCM ? SRM? Contract Concept Time Contract Determination Distance

Juggling Outsourcing and running lean When you outsource you do not remove the risk you transfer it Running your business “lean” will increase the risk Consider single sourcing Vs. multiple vendors Outsourcing and “lean” operations may give rise to greater savings Some outsourcing and “lean” strategies will increase your risk

Building resilient supply chains Pre contract award analyse risk and mitigation strategies Understand if outsourcing or running “lean” adds to your risk profile Post award manage your supply chains Undertake supplier relationship management Carry out surveillance audits with your suppliers regularly

SLA’s and the need for exercising by outsourced partners Service level agreements can put unnecessary stress on the outsourced supplier even in normal day to day operations During an incident these service levels need to be met The outsourced supplier may be providing a service specific to your recovery

42” Water main burst, Huyton, Liverpool-19 th July 2011 Resolving this event is in the hands of two outsourced suppliers

Rehearse achieving your SLA Involve your outsourced supplier in the writing of your business continuity plans Similarly involve yourself in the creation of theirs Understand the contract scope and terms and conditions Are they explicit regarding business continuity events? Rehearse your joint actions together Post exercise actions may lead to contract amendments Contract amendments can lead to a variation of costs

Continuity Ltd Adding value with resilience Risk, Continuity and Supply Chain Business Continuity Management Business Continuity BS25999 Audits Business Continuity Coaching and Training Not everything in life is black or white