Control over the IT process of Manage Third-party Services that satisfies the business requirement for IT of
- providing satisfactory third-party services while being transparent about benefits, costs and risks
- establishing relationships and bilateral responsibilities with qualified third-party service providers and monitoring the service delivery to verify and ensure adherence to agreements
- Identifying and categorizing supplier services
- Identifying and mitigating supplier risk
- Monitoring and measuring supplier performance
- Number of user complaints due to contracted services
- Percent of major suppliers meeting clearly defined requirements and service levels
- Percent of major suppliers subject to monitoring
1 Non-existent
2 Initial/Ad Hoc
3 Repeatable but Intuitive
4 Defined
5 Managed and Measurable
6 Optimized
Benchmarks/Guidelines for Scoring
1 Non-existent when
Responsibilities and accountabilities are not defined. There are no formal policies and procedures regarding contracting with third parties. Third-party services are neither approved nor reviewed by management. There are no measurement activities and no reporting by third parties. In the absence of a contractual obligation for reporting, senior management is not aware of the quality of the service delivered.
2 Initial/Ad Hoc when
Management is aware of the need to have documented policies and procedures for third-party management, including signed contracts. There are no standard terms of agreement with service providers. Measurement of the services provided is informal and reactive. Practices are dependent on the experience (e.g., on demand) of the individual and the supplier.
3 Repeatable but Intuitive when
The process for overseeing third-party service providers, associated risks and the delivery of services is informal. A signed, pro forma contract is used with standard vendor terms and conditions (e.g., the description of services to be provided). Reports on the services provided are available, but do not support business objectives.
4 Defined when
Well-documented procedures are in place to govern third-party services, with clear processes for vetting and negotiating with vendors. When an agreement for the provision of services is made, the relationship with the third party is purely a contractual one. The nature of the services to be provided is detailed in the contract and includes legal, operational and control requirements. The responsibility for oversight of third-party services is assigned. Contractual terms are based on standardized templates. The business risk associated with the third-party services is assessed and reported.
5 Managed and Measurable when
Formal and standardized criteria are established for defining the terms of engagement, including scope of work, services/deliverables to be provided, assumptions, schedule, costs, billing arrangements and responsibilities. Responsibilities for contract and vendor management are assigned. Vendor qualifications, risks and capabilities are verified on a continual basis. Service requirements are defined and linked to business objectives. A process exists to review service performance against contractual terms, providing input to assess current and future third-party services. Transfer pricing models are used in the procurement process. All parties involved are aware of service, cost and milestone expectations. Agreed-upon goals and metrics for the oversight of service providers exist.
6 Optimized when
Contracts signed with third parties are reviewed periodically at predefined intervals. The responsibility for managing suppliers and the quality of the services provided is assigned. Evidence of contract compliance to operational, legal and control provisions is monitored, and corrective action is enforced. The third party is subject to independent periodic review, and feedback on performance is provided and used to improve service delivery. Measurements vary in response to changing business conditions. Measures support early detection of potential problems with third-party services. Comprehensive, defined reporting of service level achievement is linked to the third-party compensation. Management adjusts the process of third-party service acquisition and monitoring based on the measures.