Introduction
To implement a Service Integration and Management (SIaM) framework is not something that is taken lightly and needs careful consideration and planning.
Communication is key, and a collaborative approach to the common goals of the vision will get a much better buy-in than using the directional top level view of what the vision is and how the organisation will move to the vision. By collaboration and obtaining consensus buy-in from the organisation, the vision will be better achieved.
What is the End Goal?
The end goal in most organisations will vary depending on the scale and type of ecosystem (vendor and suppliers used to deliver the service) employed and the organisations needs, however the main functions of a SIaM model are common as they are based on strong guideline principles from recognised good practice, for example the ITIL IT Service Management framework. Within the ecosystem there will need to be an agreed transition period to bed in the new model. It is key that members of the ecosystem work together, and this can begin through a working party or a workgroup, by using a collaborative approach within the model will engender a closer knit and buy-in from the suppliers and get a common agreement as to the handoffs and interactions across the service.
There will be many drivers to move to a SIaM ecosystem model. The iCore white paper ‘Managing a Multi-Vendor Service Environment’ identifies the pitfalls of attempting to implement best of breed SIaM models, showing that these do not always deliver against the initial aspirations of a collaborative ecosystem. Implementing a complex SIaM model could also quickly eradicate any expected cost savings. For example, the number of members within the ecosystem will have a direct effect on the cost of supplier management resources and the level of engagement across a wider base, so it is important to look at economies of scale, as the interactions between a smaller base will be less and therefore more cost effective.
However, this thinking will need to be offset against the fact, that having a larger supplier base, will drive commercial considerations as these suppliers can be dropped in and out with less impact to the overall model, and can have additional benefits by driving their costs down in a more competitive environment. So ultimately an optimum level of suppliers within the ecosystem needs to be agreed and again, this will utilise a workgroup/benchmarking model.
The Approach
As outlined in the iCore white paper – Managing a Multi-Vendor Service Environment, there are some key areas and tips to be considered when implementing a SIaM model. The process of changing to a SIaM model is significant to the business and can be complicated, especially if there are number of services within the business to transfer, and the level of competences within the supplier model. It should really be treated as a business transformation, as ultimately, the original objective for embarking on this journey will invariably be driven by the business in one shape or form. So the overall approach and on-going business delivery should include the following key areas:
- Strategy and governance to set the direction, define the benefits and control progress
- Architecture, project and programme management, process improvement and people change to design and plan
- Build and deliver the new state under project management. Transition the current work to the new suppliers
- Continual improvement over the life of the operation.
When moving to a SIaM model, it is essential that Governance and direction-setting should remain within the remit of the organisation utilising the SIaM. This should not be passed onto the Service Integrator (SI), although it can take input from the ecosystem. It needs to be considered that roles that are retained within the organisation, which are not passed to the SI and beyond will go through some change depending on the scale, so there will need to be consideration made to how this is communicated to the individuals concerned.
As the model evolves then the stakeholder community expands, so it is key that the original groundwork is detailed and takes everything into account. Items such as regulatory commitments need to be fed into the groundwork as these can be showstoppers if not considered and accounted for very early on in the process so they need to form part of the stakeholder community.
The fundamental basis to SIaM is to ensure the model works in a coherent, effective way. However, the right operation of the model needs to fit in culturally, so the overall governance needs to set the correct tone in regards to the expectations of the SI and the underlying ecosystem. There are key items that need to be considered as part of the SIaM, such as
- What is most critical to the business?
- What does it need to do well?
- What are the dependencies between the parties?
An important factor is the interfaces between the suppliers. As much as governance is important, it is also key to get the information flows correct and have a collaborative network to deliver the end-to-end service. It is not a bolt on; it has to be part of the operating environment before the arrival of the first supplier. The Service Managers involved need to have a clear grasp on all aspects of the obligations of the role, not just delivering service but to be part of the financial and commercial aspects too.
At this point, understanding which suppliers are key to strategic objectives will also facilitate the move to an ecosystem. Think about how you would categorise your suppliers. This doesn’t need to be an exhaustive, lengthy exercise. For example, simply ask which suppliers, if they ceased to exist, would cause critical failures within your business; which could you do without for a month; which could you easily replace. Try not to think about contract value, a £5 million contract may run more smoothly than the £50,000 per annum critical application.
The next appropriate stage to consider is to look at the overall ecosystem model that is to be integrated, this is also known as the Target Operating Model (TOM). This will need careful consideration and will need to have transition processes and risk areas taken into account before finalising. The best approach is to start with the business case or the strategy and then use that to drive the best TOM for the solution. Taking into account the risks involved will give a good indication of the cost of delivery, and provide an outline of the transition to the new model. By using a workgroup process again for the TOM will enable a better buy in from the key stakeholders, which will again highlight any areas that have not been taken into consideration.
Additionally, review key suppliers in terms of relationship. How often do you talk to these suppliers, if ever? Put some regular governance in place, discuss plans – theirs and yours – theirs may influence your decision to move to the SI model. A better understanding of your suppliers and services will allow the SI provider to better plan taking them, to understand the potential risks, and to put the right contingency and resource plans in place.
Most supplier contracts contain obligations for that supplier to cooperate with others; why then do many customers complain that their suppliers can’t appear to work together effectively, in spite of their investment in processes and tools? The lesson is that unless the participants behave in the right way, no amount of process definition or management can compensate. At the heart of this is defining exactly what you mean by ‘good’ behaviour, that obligation to cooperate needs to be broken down into specific, observable behaviour.
A general requirement to work with other suppliers to manage change might be supported by several specific behaviour descriptions, for example “we involve the other partners in the planning of our downtime and work with them to adjust our plans and to mitigate the effects on service”.
The Challenges of Supplier Change
Collaboration is easier when you share the same understanding of the environment. Successful service integration relies on establishing the key standards across contract terms, process and targets, particularly the end-to-end services required, and communicating these clearly to all parties. It also needs a degree of pragmatism – few organisations start this journey from a green field, and you will need to integrate incumbent providers. For example, existing suppliers may not have agreed service levels that are consistent with new end-to-end targets. One approach here is to gradually bring in consistent service levels over time, giving suppliers time to make the changes to their delivery processes and underlying systems without applying undue commercial pressure.
Historically, changing suppliers was a challenge. Suppliers were always keen to maximise every last cent through whatever means and were normally sales led, through long term contracts. There was also the “local knowledge” held by the technical expert in the supplier in his or her head that was never fully documented and this introduced risk in both the day to day service and the longer term. Continuity of suppliers however did bring benefits and things could be fixed through historical/local knowledge, but this was always a reactive model and ultimately prone to introducing issues and sometimes failure.
Exit plans with suppliers will need to be as carefully detailed as the engagement with them, it is key that any supplier that is removed from the ecosystem does not adversely impact other suppliers that have some level of dependency on the supplier being removed. A clear RACI matrix as part of an exit plan will help in understanding this criteria to enable a smooth transition from one supplier to another without impacting the overall service model.
The new world relating to IT provision needs to be more standardised and to a degree more rigid. In a world where there were few suppliers and long contracts, supplier change management was a skill that customers could afford to ramp down. Where contracts are short and suppliers numerous, supplier change will be a constant. This places increased demands on the quality of initial exit planning, writing in knowledge retention terms and building an operating and information infrastructure that will persist through the departure of any supplier. This then needs to be kept clean and populated at all times. The old days of finding six months before contract termination that you have none of the key documentation relating to a critical service was never good; now it will be fatal.
Conclusion
Organisations should ask themselves “Does the current model work?” “Where is it failing to provide efficient services to the business?” This information will assist in the planning to implement a SIaM model, understand the knowledge transfer landscape, and prioritise improvements. This is not the implementation of organisational change, but gaining a better understanding of the IT organisation, how it engages with the wider business and with suppliers.
Many organisations have been working in a multi-supplier environment for long enough for it to be evident that the model can be made to work. In some markets, such as UK government, early experience has shown more of what not to do than what “good” looks like. The management of multiple strands will mean that such a transition is never simple, but programme and management science has identified the essential elements necessary for success. So this can be managed reliably. Knowing this, the wise sponsor will concentrate on ensuring that the A Team is ready and available to make it happen.
Employ incentives that drive behaviour for both organisations and individuals. Why should people behave the way you want? Most formal contractual relationships are defined by what happens when things go wrong. These still need to be there, but to truly get alignment between how people on the ground behave and the goals of the ecosystem, you need to create the ‘pull’ of reward – both for the organisation and for the individual. Ultimately, successful SIaM needs to be able to recognise the contribution of the individual, and this goes beyond what can be easily enshrined in a contract. Finding out how your suppliers’ own recognition and reward systems work and exploring ways for you as a customer to feed into those processes is a good first step.
