• Focus on the strategic business objectivesand imperatives

• Nurture and enhance the relationship between provider and customer

• Enable the delivery of quality services to meet business needs

• Satisfy the expectations of the stakeholders• Enable effective decision making and mitigate risk

• Foster the creation of value and enable innovative practices to flourish

• Enable effective communication• Establish trust and confidence between all parties• Provide oversight and direction• Maintain stewardship, responsibility and

accountability

Governance objectives:

Effective governance provides significant benefits to all parties by providing the focus,

pragmatism and direction to drive value. It is important that the definition and

objectives of governance are agreed, at the beginning of a partnership, as a formal,

disciplined, hierarchical and sustainable management framework, with clear objectives.

GOOD GOVERNANCE

BEST PRACTICE GUIDE

1. Definition and assessing

the value of governance

MissionClear strategy, intent and direction for the relationshipbetween customer and provider

Roles & ResponsibilitiesWho is responsible for what, and to whom they areaccountable - both customer retained organisationand service provider

Organisation & meetingsA joint governance structure and formal reportingmechanisms to provide focus at the right level withthe right stakeholders

ProcessesTo provide the day to day management, rigour,discipline and information accuracy/currency requiredto support effective decision making

Policies and standardsEncourage the right behaviours and attitudes in linewith the mission

MeasuresMetrics to foster informed decision making

Relationship checklistEnsure your organisation has a balance of personalcontact within a formal framework

• Focus on relationship management

• Use ‘net promoter score’ or equivalent for feedback from the ‘real’ end customer

• Really understand gaps in ‘perception’ about the relationship and address them.

• Appreciate the importance of first impressions

• Identify what success looks like

• Understand your respective partner in depth before attempting to form a partnership

• Support a relationship orientation of attitudesthat makes supplier-client relationships work(think: ‘us’ rather than ‘me’)

• Promote an environment of deliberate collaboration, creating a sustainable partnership

• Create open forums: critical to create space for enhancing desired behaviour and neutralisingtoxic behaviour

• Partners need relationships which support leadership and followership, especially in timesof transition or change

Relationship governance defines the set of rules and procedures for empowering parties to

move forward in their relationship. Without an effective means of “relationship governance,”

communications fail, and the relationship fails. Establishing all the key components for

relationship governance is essential for a successful outsourcing partnership.

GOOD GOVERNANCE BEST PRACTICE GUIDE

2. Relationship governance

– the key components

GOOD GOVERNANCE BEST PRACTICE GUIDE

3. Governance: Phases for ConsiderationShared lessons learnt during the four phases of governance

Phase 1 – Pre-contract NegotiationsSetting the right tone from the outset and detailing the requirements

Build your deal for sustainable success:

• Ensure key players are involved ’cradle to grave,’ for the lifetime of contract (or pass on knowledgein summary)

• Consider ‘buddies’ in procurement and contract management to ensure corporate memory capturedand retained

• Set the right collaborative tone ‘up front’ in Invitation to Tender (ITT)

• Limit excessive promises/unrealistic expectations

• Capture relationship map from top to bottom in organisation

• Don’t forget the importance of market testing – let the suppliers give input into the way you achieveyour desired results

• Share your way of handling governance up front

GOOD GOVERNANCE BEST PRACTICE GUIDE

Things to consider:

• Exit team and introduction team – try to have different teams, so not overstretched, but review at steering group

• Monitor assets, licensing, staff and knowledge and carry out audit checks once a year

• Get example plans in ITT and build up experience from feedback in plans – Review ‘lessons learned’ from other transition plans

• Build in contingency

• Consider caps for transitions costs and maximum additional costs into transition plan

• Get both groups to consider the customer experience during transition

• Build in innovation

• Consider in flight projects

Phase 2 – Implementation, Transition, TransformationCreating a delivery timescale and formalising customer responsibilities

3. Governance: Phases for Consideration (continued)

Key success factors:

• Get balance in relationships and don’t have unequal level of experience – capture pointsof contact

• Executive oversight for strategic partners and appropriate overview depending on organisation

• Clear channels of communication, particularly for stress points

• Initiate joint working groups to solve problems – use experienced teams from other groups in supplier community

• Service levels are key and need to flex with business changes

• Change control is absolutely key for governance

• Track change control % to original deal – make clear that you recognise that the supplier needs to make money and won’t want to absorb scope creep,but equally should not take advantage of costs for change being out of proportion to original deal

• Recognise change will happen in both companies and need flexibility

• Clear process for dispute resolution

• Consider exit plan right from the get-go. Exit will happen, one day (see NOA Guide to Exit Management for details)

• Continue to drive value and remove costs in the supply chain with both parties benefitting as bring minds together

• Understand where we are in customer priority order (% of business and strategic roadmap).

Phase 3 – Steady StateEnsuring flexibility throughout the delivery of the contract, including processes for resolving problems andmediation

GOOD GOVERNANCE BEST PRACTICE GUIDE

3. Governance: Phases for Consideration (continued)

GOOD GOVERNANCE BEST PRACTICE GUIDE

Ensure that you:

• Establish exit management governance; agree meeting attendees, agendas & frequency

• Define and acquire resources to carry out customer obligations within the exit plan

• Identify risks and issues associated with each workstream and track within an agreed management tool

• Educate all parties of security, confidentiality, audit and exit / transition governance with which they must ensure compliance

• Monitor (via regular exit governance meetings and offshore presence) the behaviour of the outbound supplier and their adherence to the exit agreement

Phase 4 – ExitAdvice for negotiations, licensing of the supplier’s proprietary tools and technology with the transfer of asserts &third party contracts

3. Governance: Phases for Consideration (continued)