Andrew Smith explains how businesses can provide a service strategy that delivers for every employee, every customer and beyond.
Digital transformation and its skills gap, DevOps, Outsourced Services, Customer Experience are all challenges facing most mid-market organisations and enterprises. Often, these challenges underpin an overarching business strategy that will touch every employee, department and customer as they strive to become the best company to work for and the best firm to do business with.
And services are the defining component, whether it’s for millennials seeking a funky banking app or the employee that simply wants to know that any service request they make of IT, HR/Payroll etc. is easily logged and dealt with. Managing services and their providers (internal and external), that deliver successful outcomes in a connected way, will retain staff and grow customer value.
So today, what makes defining and delivering multiple services so strategically important?
The acceleration of business transformation (digital transformation or shared services), demands a completely different approach to operations, the systems being used and the best practices to re-engineer the processes required to facilitate services.
In short, the digital rewiring of organisations has seen the consumption of IT and business services undergo change due to the rise of on-demand consumers in the workplace – regardless of sector (B2B, B2C, Private or Public) and channel. These changes have reappraised the role of outsourcing, best seen in the rise of DevOps, especially where legacy IT needs harnessing and modernising for Big Data, the Internet of Things (IoT) and Mobile – this could be a bank, an NHS Trust or a council.
Consequently, the roster of service providers is ever-changing. Every department has become a service provider and/or integrator. Skills gaps are being filled externally and internationalisation will see some enterprises fully outsource specific functions for global coverage.
The change, which also includes offshoring services, provides companies with greater competitive edge, offset by an increasing need for closer supplier management. Multiple drivers, including cost and everything-on-demand innovation, compel organisations to embrace multi-sourcing — the desire to work with one-to-many suppliers, internal/external, in a managed ecosystem of integrated services and processes – across its business.
Gartner defines multi-sourcing as the disciplined provisioning and blending of business and IT services from an optimal set of internal and external providers in the pursuit of business goals. Gartner believes, on average, an enterprise in North America is now reliant on at least 13 multi-sourced services in its pursuit of operational efficiencies, market advantage and change
Skills and innovation gaps are primary drivers that have led many organisations to restructure functionally; in short, accepting the departments that fail to be competitive and outsourcing their functions to specialist providers. Suddenly, those tasked with service delivery find their role has become that of a Service Integrator, ensuring all services are connected and managed end-to-end, regardless of the number of providers involved in a service supply chain.
This is SIAM (Service Integration and Management). The realisation that changes are needed in the engagement between providers, their suppliers and the customers, that see Service Level Agreements (SLAs) (and Operational Level Agreements) being extended (end-to-end).
Services as a Service
Today, service consumption is on-demand, driven by specific business needs that are best delivered through SaaS solutions. For example, Salesforce’s mantra has always been “easy to adopt” with benefits such as quick deployment and cost optimisation. While these benefits contribute to the development of a hyper-connected operating model, the ability to integrate and orchestrate all the underlying functions (and underpinning contracts) coupled with a strong and flexible governance structure, is invariably complex and not out-of-the-box – with the odd exception!
So, you run Salesforce but how do you deliver it? Whether via WiFi, Network, or Mobile (3G/4G) straight away there are other internal and external providers that come into play. Services as a Service needs an exact model to ensure organisations have interoperability across multi-sourced operations.
Multi-Sourcing to SIAM – Getting IT Right!
This may be obvious to many enterprises, after all the likes of NTT Data, Atos and Cap Gemini would not be in business if they did not provide outsourced functions and services, as multi-sourcing is a proliferation of needs. These can be both physical (skills) and virtual (Cloud and Mobile) and often the designed service will pull upon one-to-many providers.
Where outsourcing was often driven by cost, multi-sourcing pulls upon failsafe best operating practices for continuity. Consequently, this requires a complete change for any service integrator, be that IT or Marketing, for example, as it brings different elements such as contract value and performance, vendor selection, procurement and provider collaboration into play. SIAM becomes the overarching management framework.
In IT, SIAM emerged from the UK Public Sector to address integration issues and management of multi-sourcing for shared services. From this, four approaches exist centred around the service integrator, internal or external, maybe a lead supplier or a hybrid mix. At the start, the internal organisation often retains core responsibilities while assessing a mix of multiple service providers to extend and enhance its service catalogue. Another model opts to contract with one primary/lead service provider (think Atos) that becomes the integrator and manager, with the remit to bring in providers.
“It is a matter of competitive necessity and advantage,” said Forrester Research principal analyst Bill Martorelli. “Outsourcing suppliers have learned that it is good to have the capability to serve as a coordinator for multi-sourcing engagements.”
“Part of the selling proposition for suppliers like HP is they are facilitators of customer relationships with other suppliers, not inhibitors that they will actively undermine other participating suppliers.”
Regardless of the SIAM model chosen, a service supply chain, supported by end-to-end service level management, is needed to measure the success of each of the service providers and the overall performance and value of multiple contracts across all services.
It is easy to think of SIAM in terms of supplier management, especially in Digital Transformation, as the challenge comes from the range of services that are often sourced but delivered as a single service to the business, employees and customers. Here, a service could be a combination of one integrator and multiple service providers and, as Shadow IT subsides in the wake of the structure offered by SIAM, so new realities exist for IT.
Gartner – Beyond Traditional IT – New Realities. More than 30 per cent of current IT spend is not part of the IT budget. However, overall responsibility for supporting these new initiatives, once they are tested and stabilised, will reside with traditional IT. Managing new providers, workflows and new types of assets will become crucial to IT’s success.
For SIAM to be effective two things are paramount from the get-go for any service integrator.
- The right Service Providers need the right collaboration platform. Selecting the right providers is important if a business is to benefit from an extended supply chain of expert services. But without collaboration, service delivery will be compromised by a lack of transparency, as providers will fail to be joined-up in the pursuit of the organisation’s business demands.
- The right governance model is needed to enforce the goals of the service integrator and the contractibility of the providers. The rules of governance should be identical in every contract, otherwise the supply chain will fail.
- Do not apply procurement-only principles when provisioning services as this will lead to individual providers being measured with siloed metrics – focus on shared targets.
- Governance needs a comprehensive end-to-end view of the deployed services and what a multi-sourced portfolio should look like. Centralised management will assess how providers delivered against communicated SLAs, OLAs and KPIs.
Governance enables strategic SIAM to assess value and ensure performance metrics and service levels are in-line with expected business outcomes. This only occurs when organisations integrate multiple providers across processes and technologies, so they must:
- Standardise processes and KPIs within a collaborative platform, and;
- Measure performance metrics and service levels equally across all providers for end-to-end alignment of service(s)
- Establish rules of accountability for all service providers that a part of the catalogued service
- Ensure collaborative operation between providers follows a framework, such as COBIT or ITIL
Without these in place, any benefits that may be achieved from any SIAM model are undone. The pitfalls are numerous, such as the “provider waiting room” where vendors wait for each other. This does not jeopardise individual SLAs but the lack of collaboration slows delivery.
Getting Frameworks to Work
SIAM has not been designed to be either prescriptive or exclusive, in fact it integrates with a host of frameworks, including ITIL, Lean and DevOps, to improve service lifecycles.
For example, SIAM will leverage ITIL in organisations with a dependence on multiple service providers across one or many business functions. SIAM recognises the inherent process reliance many organisations have for the delivery of services and adds a contractibility discipline between the business and providers to ensure services are performing within agreed targets.
Conversely, if an organisation just relies on standard service management processes to deliver services it could be detrimental. For example:
- New services need to recognise cross-provider functions. Without multi-source collaboration, supply chains become conflicted and SLAs compromised, creating disruption and a request bottleneck
- Siloed providers run the risk of duplicating effort and overlapping each other. SIAM ensures visible work-loading and handover between service providers
Any SIAM model needs the ability to create a single interface across the services ecosystem. Like ITIL, it needs to work with consistent and comparable metrics from a single integrated toolset, that is easily designed and realised ‘out-of-the-box’. SIAM should enable organisations to switch service providers based on performance, interoperability and value.
Effective SIAM needs a pivotal set of processes for the successful delivery of the service provider’s operations. For example, SIAM can leverage at least eight core ITIL processes from a single platform:
- Change Management
- Capacity Management
- Availability Management
- Event Management
- Service Continuity Management
- Asset and Configuration Management
- Service Catalogue
- Service Level Management
The New Role(s) of SIAM
Digital may be the goal, but it can add complexity, especially to IT. For example, why DevOps? Because there is a desire for Big Data and a need to build apps for a generation of end-users and customers that don’t know what a Mainframe looks like. Consequently, unless your organisation employs a firm such as Atos as the Service Integrator, two roles emerge to ensure value and performance.
The SIAM Programme Manager
This individual sets up and manages the programme in close alignment to business goals and the catalogue of services.
This role should not be seen as a procurement position, although contracts and finance are primary responsibilities. It is the next level down where the outputs are best demonstrated. The Programme Manager is permanently tracking contract obligations and is there to continuously mitigate failed changes and amendments. This function is responsible for contract value, supplier management and financial assessment of every undertaking with any service provider.
The Service Delivery Manager
The primary working objective of this role is to assess day-to-day performance trends from all service providers (internal and external) that are part of the programme, how they co-exist and deliver through a service supply chain.
Typically, the Service Delivery Manager will be challenging the OLAs and SLAs in place and recommending improvements while continuously inspecting the roster of providers against the targets being set for the services being delivered.
Differences in governance and delivery are there with clear responsibilities defined for the roles.
SIAM in an ITSM Platform
SIAM requires service collaboration to tether numerous service providers to one operating model and very few ITSM platforms truly provide the capability to automate the secure exchange of requests between service desk systems without lengthy consulting and expensive API connections
ITSM integration expands fulfilment across the service supply chain while preserving existing operational efficiencies and process compliance built into the ITSM platforms for two-way integration, where service providers may function as either initiator or provider. This helps maintain the integrity of every systems’ workflow, offer complete visibility of the entire service lifecycle to all parties and manage SLAs for the entire process.
For the end-user, employee or customer they want to be able to view and interact with their entire services entitlement through a visual catalogue or one single self-service portal.
Critical Success Factors
For any SIAM model, where multi-sourcing is prevalent, success is defined when applied consistently to business demands and the supply of connected services. Governance is there to manage relationships between all parties and supported by processes to meet agreed goals, but it is only relevant if programme managers can account for the deliverables of the services being provided:
- Do they allow the business to positively transform?
- Is the business now competitive and easier to work/transact with?
- Are employees increasingly satisfied with their workplace and likely to remain loyal?
- Do services reduce costs and fully optimise productivity?
- Is the organisation fully utilising its resources in the retained services?
- Are multi-source providers delivering more – quickly and cost effectively? Has overall service delivery improved?
- Is it removing operational risks and failures?
- Is it nurturing change, agility and innovation?
If your organisation is rewiring its services for Digital or a Shared Service approach, multi-sourcing will add the skills and innovation you need to succeed as well as optimising costs. The benefits of multi-sourcing and SIAM are real, but organisations must recognise that it is an operational shift that requires cross-functional experience, time, skillsets and/or resources and a toolset that is a single collaborative interface.
Gartner Group Key Trends and Harvard Business School Press
NTT Data Services Insight
SIAM Foundation Bok