Today IT services are being provisioned through infrastructure that is located within the organizations premises or 3rd party premises. Many IT organizations are also adopting various cloud based delivery models as well. Businesses utilize the IT services for delivering the business services, as business enabler, for business communications, etc. Thus, their reliance on IT and newer technologies is increasing every day.
With the advent of outsourcing the IT service delivery is itself dependent on service providers. A study suggests that on average every organization has outsourced to at least 3-5 IT service providers irrespective of the business domain. With multi-sourcing organizations tend to become a hotpot of the various practices from vendors. While at micro level the management lies with the vendors and they can do it well, the overall consolidation of services remains a challenge for the businesses. The Business services that are formed by the combination of smaller underlying services lack uniformity from design, to transitions to operations. This results in service packages that are either incompatible with each other or require a big integration effort. The biggest impact of this is clearly visible in slower time to market and increase in number of changes to the services .Vendors tend to solve this by associating themselves at higher levels, provide larger set of managed services. Here they call themselves as partners for the business, and try to drive services as seamlessly as possible, but in turn they charge heavily for this. Meanwhile there is no control of businesses on the individual (micro) services. All of this has made management & delivery of business services complex and challenging than ever before. Cost benefit passed on by these hybrid environments goes down the drain due to challenges in managing them. Thus, dilemma for the business is ‘How to get the control, uniformity and costs at an optimum level?’ SIAM is an answer to the Dilemma.
Moreover we come across situations where incumbent service providers are more often replaced by new service providers. The main driver of such changes is the difficulty of businesses to manage the operations. Where one service provider provides lower cost of operations, the other may provide technical acumen of highest level. Unfortunately, getting a balanced package is rare. The businesses try to cope with these shortcomings by adding the funds to projects over a period of time. And as the threshold is breached, businesses look for new suppliers to meet their needs. The change may be good in some aspects, but the cost associated with the transition and stabilization of services is painful and considerably high.
Since delivery of Services are fragmented in a multi-vendor environment with different service components being sourced from separate vendors, there are grey areas in context of ownership of overall service delivery. It is unfortunate that structure of multi-vendor or multi-sourced environment makes management of vendors besides governance of process and activities a very complicated task. Multi-sourced environments rely heavily on the core management competency of the business to deliver seamless services. Also, every organization has certain tools & processes which are unique to them and so is true for the vendor organizations. Thus, complexity of integration of multiple tools, processes and people besides the overall governance in a multi-vendor environment present a perplexing view of services that easily gives up on efficiency and effectiveness.
SIAM aims at strengthening this core and provides the directions to the suppliers and vendors to deliver defined outcomes. This drives effectiveness and efficiency of the services as expected by the business, but not as projected by the supplier.
Due to the grey area imposed by multi-vendor environment, we often find organizations to be in a situation where one vendor tries to pass on the accountability to another vendor for concerns related to delivery of services that have vendor inter-dependency and shared accountability. This creates the scenarios where there is finger pointing between the vendors resulting in key performance indicators getting blurred.
The resultant of scattered governance and multiple hierarchies is that the business suffers. They face an even daunting task to ensure that business service delivery to the end customer is not affected. Thus, the challenges of multi-vendor environment make the management of end customers, transitions and vendors even more challenging.
SIAM provides a structure to how the various suppliers interact and support each other. The dependencies between the services (by different vendors) are identified and SLA’s are designed to support the overarching services. The vendors get plugged into a structure (SIAM) that pushes suppliers to bring the best forward while appreciating the goods from other suppliers. The disputes are handled through a credit system (based on the dependencies), which leads to penalties and rewards.
Another challenge that organizations face is service and vendor consolidation during mergers & acquisitions or deconsolidation during demergers and spin-offs.
Thus, questions that every CxO possibly have are:
• How can all the above challenges be simplified?
• How can the impact of vendor change on their organization be minimized?
• How can the effect and impact of mergers & acquisitions or spin-offs on service and vendor consolidation neutralised?
The answer is a highly flexible integration model which ensures that service management becomes a strategic asset for the organization. A scalable SIAM keeps its options open to accept or reject vendors based on their performance, while giving adequate level of feedback to improve. It brings an ease of plugging or de- plugging a vendor whenever the need be without impacting the business service delivery. Besides it also simplifies the process of service consolidation and deconsolidation at the business or strategic layer. This model is in line with the Service Management And Integration (SIAM).
My book "Making SIAM Work - Adopting Service Integration And Management For Your Business" provides explanation about the concepts of SIAM using a mechanical fluid-pump analogy. It provides a model which would effectively and successfully make SIAM work for your business, providing a clear step-by-step solution for adopting and implementing SIAM. It highlights the prerequisites and outputs that would enable organizations to use SIAM in achieving desired outcomes.
