SIAC Vendor Management Office

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SIAC Vendor Management Office

• Robert Durso
• Director - Vendor Management Office
• October 8th 2002

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Mission

• Expand and improve the use of third party
  vendors throughout the NYSE and SIAC
• To improve time to market capabilities
• To augment technical and domain competencies
• To improve operational efficiencies and reduce
  costs

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Vendor Management Office

• Maintain Master Services Agreements (MSA) with
  Preferred Vendors
• Maintain Vendor Relationship Qualify additional
  Vendors
• Maintain Program Project Measurement Metrics
• Provide training workshops for Project Managers
• Assist Project Managers in
• the evaluation and selection of projects,
• developing and evaluating proposals, statements
  of work, service level agreements and other
  support documents,
• monitoring vendor performance

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Critical Success Factors

• Careful Selection and Planning of Projects
• Competencies of Preferred Vendors
• Strong Support Mechanism for Project Managers
• Well planned Knowledge Acquisition Phase
• Close monitoring of Vendor Performance
• Well Defined Outsourcing Infrastructure

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Vendor and Project Selection
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Selection Criteria

• Vendor Selection Criteria
• Corporate Profile Revenue, number of employees,
  listing
• Enterprise Competencies or Boutique Technology
• Domain Expertise
• Quality Initiatives (CMM Level 3 or higher)
• HR Policies
• Offshore Development Center Experiences
• Offshore Contingency Plan and Infrastructure
• Flexibility, Reliability and Peer Organization
  References

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Selection Criteria

• Project Selection Criteria
• Projects with resource constraints
• Projects with clearly defined requirements
• Conversion Projects
• Maintenance and Enhancement Projects
• Support Projects

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An assessment should be performed prior to launch
Setting the stage for a successful launch
Offshore Feasibility Assessment
KNOWLEDGE ACQUISITION
QUALITY ASSURANCE
USER ACCEPTANCE
PROJECT EXECUTION
PREPARATION
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Competitive Bidding Verification

• Competitive Bidding - RFP's will be sent to
  preferred vendors as is stated by SIAC
  Procurement and the Competitive Bidding
  Procedure.
• Phased Bids - It is recommended that each project
  is broken down into smaller phases. Each bid
  response should include all associated fees for
  each phase. This will give us the ability to
  evaluate each Vendor's phased bid response.
• Internal Verification of EffortCost - the VMO
  and the project managers will work together to
  calculate and verify bids by estimating effort
  and multiplying by Fees within the MSA (Exhibit F
  - "Fees".).

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Project Management Workshops

• Course is a scaled down version of a 3-semester
  hour graduate level software engineering class
  offered by SMU.
• It builds on the best practices from both
  Government and Industry to provide Project
  Managers with essential information needed to
  either solicit bids for a development project or
  to respond to a request for proposal (RFP) for a
  development project.
• It introduces the Project Managers to the most
  common legal issues that are encountered in a
  software acquisition.

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Managing the Metrics
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Five Views For Managing The Program

• Measuring Organizational Commitment
• Measuring Project Status
• Measuring Time-to-Market
• Measuring Skills Augmentation
• Measuring Costs

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Measuring Organizational Commitment
In Pipeline

• Vendor Data
• Vendor A
• No of Projects
• of Projects
• Vendor B
• No of Projects
• of Projects
• Vendor C
• No of Projects
• of Projects
• Vendor D
• No of Projects
• of Projects

Active Projects
Off-Shore
Onsite
Project Size

• Portfolio Data
• No. of Engagements
• Type of Projects
• Development
• Maintenance
• Technical Upgrades/Conversions
• Other
• Total FTEs Under Program
• On-Site
• Off-Shore
• Total Committed to Projects
• Total in Local Equivalent
• Total VMO
• Offshore to IT Budget

Project Name
Project Name
Project Name
Project Name
Project Name
Project Name
Project Name
TOTAL
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Measuring Project Status
Project Description Replace with Brief Project
Description Business Objective Replace with
Cost Savings, Revenue Generation, Compliance,
Governance, Quality
Project Type Technologies Project Phase
Scheduling Variance Resource Variance Vendor
Costs To Date Original Vendor Budget Revised
Vendor Budget
Major Achievements Aug- Replace with Major
Achievements either for current month or previous
months. Sep This section is indented for 7
characters.
Outstanding Issues Replace With Outstanding
Issues
Insert Major Statement Regarding Project For
Current Month
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Measuring Time-to-Market
Actions To Accelerate Throughput And Measuring
Their Impact
Actions
Measurement

• Re-engineer Delivery Process
• Adopt a Service-Based Requirements/Design Model
• Employ Parallel Development Process (24x7)
• Add additional resources, I.e. Skills/Staff
  Augmentation

• Backlog Size
• Backlog Duration
• Average Elapse Time for Work-Unit, e.g. Function
  Point
• Elapse Times against Fixed Delivery Time-frames

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Measuring Skills Augmentation
Local Staff Augmentation Project Type

• Local Staff Augmentation versus Offshore Staff
  By
• Environment Work (Mainframe, Internet,
  Client/Server, Other)
• Project Type (Development, Maintenance, Upgrade,
  Conversion, Other)
• Skills Mix (SAP, COBOL, Websphere, C/C, Other)
• Functional Area (Administration, Trade Support,
  Q/A, Other)

Offshore Functional Area
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Example for Measuring Cost
T MGross Billing Savings (Local Equivalent
Rate x Man Days/Hours) (Vendor Rate x Man
Days/Hours)
Fixed PriceGross Billing Savings (Local
Equivalent Rate x Man Days/Hours) (Contracted
SOW)
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Outsourcing Status
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Offshore Status

• 6 Active projects at the NYSE with 3 Off-Shore
  Vendors
• Master Service Agreement negotiated with several
  Off-Shore Vendors
• MSA Supporting Documents Available
• Request For Proposal Template
• Statement Of Work Template
• SOW Change Request Document
• Service Level Agreement Template
• Project Evaluation Cost Analysis Template
  developed
• Vendor Management Office Intranet Site

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Measuring our Mission1 Project - Requirements
through Implementation

• Speed to Market
• 2 time-zone prototyping
• Strong Project Management coupled with CMM Level
  5 company
• Active defect containment measures
• Skills Augmentation
• Ramped-up 25 skilled developers in 6 weeks
• Resulting Time and Cost Savings
• 18 modules, with significant process re-design
• 10 months
• Approximately 50 Gross Billing Savings
  (excluding transition, communication and other
  overhead costs)

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VMO Lessons Learned

• Senior Level Sponsorship
• Define a Clear Mission
• Communicate and Educate Early and Often
• Define VMO Infrastructure Early (Even before
  first pilot)
• Continuous Process Improvement
• Establish Achievable Goals
• Define Program/Project Metrics early
• Solid Risk Management Strategy
• Plan Transition in/Transition Out for all
  projects
• VMO ease of use is as important as a delivery
  model

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SIAC Vendor Management Office