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Tech & Sourcing @ Morgan Lewis


When we represent customers in outsourcing and managed services transactions, we spend a significant amount of time drafting the exhibits for transition, which is typically a major project in and of itself. In order to help clients think about the major components of transition, we often provide the following checklist of common workstreams to facilitate our discussion.

  1. Governance – Governance is an overarching workstream that spans all phases of transition. A key component is the formation of a transition management office that is responsible for managing the overall transition (including performance and risk management) and coordinating with the company’s governance organization.
  2. Planning – Detailed design and implementation planning is critical to ensuring timelines are integrated and met, with all dependencies considered. Plans typically include the responsibilities of each party, anticipated completion dates, and acceptance criteria.
  3. People and Asset Transfers – If people and/or assets are to be transitioned to the service provider, then a team of subject matter experts will need to be coordinated. This team—often comprising HR professionals, benefits and tax specialists, and procurement and other leads—will navigate the offer and hiring process, as well as inventories and bills of sale, as applicable.
  4. Resource Mobilization – This workstream involves ramping up the service provider’s resources, both onshore and offshore. The plan should include timing, number of personnel, and skillset requirements.
  5. Operations – The overall objective of the operations workstream is to enable the successful transfer of in-scope functions to the service provider. A comprehensive plan for documenting processes and procedures, as well as knowledge transfer and training, is key to enabling the successful continuation of services. The assessment, design, and validation of the service provider’s activities are typical subcomponents of this workstream.
  6. Processes and Documentation – Key activities in this workstream include compiling process and service-related documentation and procedures and implementing repositories (including providing and implementing the systems and hosting for such repositories).
  7. Infrastructure and Security Enablement – The main focus of this workstream is to set up and operationalize the service provider’s infrastructure (including for offshore delivery centers) and the associated security tools and requirements. In many cases, the parties will undertake security reviews and assessments of the service provider’s environments, including inspections of the service provider’s physical sites. Any gaps discovered during security reviews typically are addressed as part of this workstream.
  8. Network – Network connectivity and associated bandwidth requirements are assessed and documented as part of the network workstream. Requirements may include connectivity between company and service provider sites, public and private cloud environments, and primary and backup sites. Testing the availability of the connectivity is often a key acceptance criteria to finalizing cutover and allowing for services to begin.
  9. Change and Communications Management – As most outsourcing and managed services transactions result in significant change, a comprehensive communication and change management plan for internal and external audiences and stakeholders may be warranted. The company will need to determine the level of effort required from the service provider as well as the company’s own internal change and communications subject matter experts.
  10. Third-Party Contracts Disposition Management – As noted in previous posts, third-party contract collection and disposition may require significant effort from company and service provider resources. Agreeing to and documenting these responsibilities are key parts of this workstream.

While transition can be complicated, it is critical to the success of any transaction. Being mindful of the potential workstreams can facilitate this process.