1. Info-Tech Research Group1 1 1 Headline / Subhead Vertical Spacing V4 Info-Tech Research Group, Inc. Is a global leader in providing IT research and advice. Info-Tech’s products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns. © 1997-2014 Info-Tech Research Group Inc. Terminate the IT Infrastructure Outsourcing Relationship There must be 50 ways to leave your vendor. Info-Tech's products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns.© 1997 - 2014 Info-Tech Research Group

2. Info-Tech Research Group2 2 V4 This Research is Designed For:This Research Will Help You: This Research Will Assist:This Research Will Help You: This Research Is Designed For:This Research Will Help You: This Research Will Also Assist:This Research Will Help Them: Our Understanding of the Problem Infrastructure Managers/VPs of organizations that have outsourced IT infrastructure and are considering terminating their current agreement. Diagnose the root cause behind your outsourcing problems. Decide whether to terminate the agreement and switch service providers. Plan to rehabilitate and stay with the provider, re-negotiate, or switch providers. Move your data center to a new service provider. IT Directors and CIOs of organizations that have outsourced IT infrastructure CFOs of organizations that have outsourced IT infrastructure Understand the risks and cost implications of terminating outsourcing agreements and switching vendors. Understand the different cost models for each outsourcing deployment method and how the current IT operating expenses may change after the switch.

3. Info-Tech Research Group3 3 V4 Resolution Situation ! Complication ? Info-Tech Insight Executive Summary Many events can trigger an organization to leave its IT infrastructure outsourcing (co-location, managed services, IaaS) service provider, including dissatisfaction with the current agreement and changes in organizational or vendor circumstances that make it impossible or no longer desirable to stay. Moving your IT infrastructure can be a tricky process, especially for critical infrastructure with stringent availability requirements. The high switching costs in most contracts make it not only more expensive to switch, but also more difficult to find a new vendor. Many organizations continue to experience the same pains even after they’ve switched vendors because the vendor isn’t always the cause of the problem. Identify the root cause of your outsourcing problems to make sure that switching providers isn’t just a temporary fix. Re-assess your outsourcing strategy to make sure that your outsourcing requirements and selected deployment model are still suitable for your business. Carefully make the financial and non-financial case for switching vendors and rehabilitating the relationship. Implement good project management practices when implementing the move to minimize the risks involved and maintain uptime of critical infrastructure. 1.Don’t switch providers unless there is no way to rehabilitate the current agreement and relationship. Switching is expensive, and the vendor is often not the problem. 2.The only thing that’s certain in IT is failure. Embrace this and focus on helping your provider continuously improve its mean time to respond and mean time to repair. 3.Moving your data center is a large project that involves two steps. You must move infrastructure into the new vendor’s site, and move your infrastructure out of your current site.

4. Info-Tech Research Group4 4 4 Headline / Subhead Vertical Spacing V4 Enroll in a GI for your project. Email GuidedImplementations@InfoTech.com GuidedImplementations@InfoTech.com Or call 1-888-670-8889 and ask for the GI Coordinator. How to use this blueprint We recommend that you supplement the Best-Practice Toolkit with a Guided Implementation. Guided Implementations are included in most advisory membership seats. Our expert analysts will provide telephone assistance to you and your team at key project milestones to review your materials, answer your questions, and explain our methodology. Info-Tech Research Group’s expert analysts will come onsite to help you work through our project methodology in a 2-5 day project accelerator workshop. We take you through every phase of the project and ensure that you have a road map in place to complete your project successfully. In some cases, we can even complete the project while we are onsite. Do-It-Yourself Best-Practice Toolkit OnsiteWorkshops Book your workshop now! Email WorkshopBooking@InfoTech.com to get started. WorkshopBooking@InfoTech.com Leverage each of the tools in this blueprint to complete the optimization of this project. Do-It-Yourself Implementation Use this Best-Practice Blueprint to help you complete your project. The slides in this Blueprint will walk you step-by-step through every phase of your project with supporting tools and templates ready for you to use. You can also use this Best-Practice Blueprint to facilitate your own project accelerator workshop within your organization using the workshop slides and facilitation instructions provided in the Appendix. Free Guided Implementation

5. Info-Tech Research Group5 5 5 Headline / Subhead Vertical Spacing V4 What’s in this Section:Sections: Diagnose the problem Section 1: Diagnose the problem Section 2: Validate the outsourcing strategy Section 3: Make the case and structure the project Section 4: Develop a plan to stay with the provider Section 5: Select a new provider Section 6: Develop a plan and execute the move Identify the reasons for terminating your relationship Diagnose the problems underlying your dissatisfaction with the current agreement

6. Info-Tech Research Group6 6 6 Headline / Subhead Vertical Spacing V4 Dissatisfaction with the current agreement and changed circumstances are the two main triggers for leaving a vendor Organizations can leave their vendor either by terminating their existing agreement early or by not renewing their contract. Either way, there are generally two main reasons outsourcing agreements end: The vendor is not meeting expectations set out in the service level agreement (SLA). The service is too expensive in comparison to that offered by competitors. The costs are far exceeding expected costs and the financial case for the project has been destroyed. The vendor no longer offers or provides the required services. The vendor’s service levels have deteriorated due to changes such as an acquisition. The member’s new requirements have become too expensive under the current contract. The member has new requirements that the provider can’t meet. The member has developed significant internal capabilities and can support infrastructure cheaper in-house. The vendor has changed: Your organization has changed: 1. Dissatisfaction with the current agreement 2. Change in circumstances

7. Info-Tech Research Group7 7 7 Headline / Subhead Vertical Spacing V4 Activity: Identify problems underlying the dissatisfaction with your current agreement Don’t confuse symptoms and problems. You risk experiencing recurring frustrations by addressing the symptoms and ignoring the root problems. 1.1 Sticky Note Exercise Recommended Participants Infrastructure Manager/VP IT Infrastructure Team Steps 1.Hand out a pad of sticky notes and pens to each participant. 2.Within five minutes, individually list why you’re considering terminating the outsourcing agreement. 3.Post all the sticky notes on the board and discuss whether each sticky represents a symptom or root problem. Place symptom sticky notes on one side of the board and root problem sticky notes on the other side. 4.Group common themes together and draw connections between problems that may be triggering posted symptoms. 5.For symptoms without root problems attached, discuss what the underlying problem may be. 6.Record the root problems and symptoms under Project Background in the Terminate the Outsourcing Agreement Detailed Business Case.Terminate the Outsourcing Agreement Detailed Business Case Example: Symptom: Our managed services agreement is too expensive Symptom: The vendor’s communications are always too last minute for us to react We chose the wrong deployment model Poorly scoped requirements We bought solely based on vendor brand We never reset our contract, ad hoc service additions Lack of vendor management governance Lack of collaborative vendor relationship

8. Info-Tech Research Group8 8 8 Headline / Subhead Vertical Spacing V4 Re-assess your outsourcing strategy Develop vendor management capabilities Develop a collaborative relationship Re-negotiate your contract The vendor is not always the cause of dissatisfaction: switching vendors will not magically fix your problems Common Symptoms Potential Root Problems Rehabilitate Some common symptoms can be addressed by rehabilitating the situation without leaving your vendor. Here are some examples: The vendor can’t meet business needs (e.g. not elastic enough to meet rapid growth requirements) The agreement is too expensive Poorly scoped requirements Inappropriate deployment model Certain components should not have been outsourced The vendor is a poor communicator and informs us of disruptions last minute The vendor is always trying to nickel and dime us The vendor can’t meet the SLA and the penalties aren’t doing anything The contract is confusing Lack of vendor management Non-collaborative approach with the vendor SLA exceeds the vendor’s capabilities The contract is poorly designed and uses “weasel wording”

9. Info-Tech Research Group9 9 9 Headline / Subhead Vertical Spacing V4 Context and Problem The organization’s infrastructure was outsourced through a customized managed services agreement. The organization has grown over the duration of the service, resulting in changes in requirements for the service. All the requirements were added ad hoc after the contract was established, so there wasn’t a formal process to review the new contract and keep the costs in check. Solution The organization needed to know whether it was paying too much for its services. Since the service was highly customized, a direct price comparison was not possible without going to the market and working with vendors to understand the requirements. The organization went to the market and opened up for vendor proposals, prepared to either rehabilitate with the existing vendor based on competitor prices or switch vendors. Case Study: Get beneath the real drivers of your expensive service Industry: Power/Utilities Location: United Kingdom Insight Outsourcing agreements can seem too expensive for many reasons. Understanding the drivers for the expensive agreement is important. Regularly review and re-evaluate the contract with your vendor over time, especially if your organization is actively modifying its requirements. If you’re unsure about whether you’re paying too much for a highly customized service, go to the market to understand competitor offers, but be prepared to switch. Insight

10. Info-Tech Research Group10Info-Tech Research Group10Info-Tech Research Group10 Headline / Subhead Vertical Spacing V4 Prior to the Guided Implementation During the Guided Implementation Value & Outcome An Info-Tech Consulting Analyst will discuss with you: At the conclusion of the Guided Implementation call, you will have: Arrange a call now: GI 1 – Call 1: Diagnose the problem Compile the symptoms of your outsourcing problems Brainstorm potential root causes of your problems An approach or process to help you understand your underlying problems A process to help you understand your underlying problems Deliverable: Next steps to decide how to overcome your outsourcing issues Email GuidedImplementations@InfoTech.com or call 1-888-670-8889 and ask for the Guided Implementation Coordinator to book a Guided Implementation in your organization.GuidedImplementations@InfoTech.com

11. Info-Tech Research Group11Info-Tech Research Group11Info-Tech Research Group11 Headline / Subhead Vertical Spacing V4 What’s in this Section:Sections: Validate the outsourcing strategy Section 1: Diagnose the problem Section 2: Validate the outsourcing strategy Section 3: Make the case and structure the project Section 4: Develop a plan to stay with the provider Section 5: Select a new provider Section 6: Develop a plan and execute the move Re-assess outsourced infrastructure components Re-evaluate your short-term and long-term requirements Validate your selected deployment model

12. Info-Tech Research Group12Info-Tech Research Group12Info-Tech Research Group12 Headline / Subhead Vertical Spacing V4 Info-Tech Research Group Helps IT Professionals To: Sign up for free trial membership to get practical solutions for your IT challenges www.infotech.com Quickly get up to speed with new technologies Make the right technology purchasing decisions – fast Deliver critical IT projects, on time and within budget Manage business expectations Justify IT spending and prove the value of IT Train IT staff and effectively manage an IT department “Info-Tech helps me to be proactive instead of reactive – a cardinal rule in a stable and leading edge IT environment. - ARCS Commercial Mortgage Co., LP Toll Free: 1-888-670-8889