The music of multi-sourcing (part 1): Discordant service providers

Old broken disused piano with damaged keys

Today organisations are being challenged to deliver customer-centric and adaptive services to their internal and external customers that keep pace with changing customer expectations.

To meet this challenge, a single customer service will rely on the flexible integration of several external specialist business and IT services, with internal services that focus on the organisation’s areas of differentiation and competitive advantage.

Delivering the business outcome that meets customer expectations across these discrete internal and external services does not just happen.

In the IT industry, we are used to managing a host of different IT service providers for clients: outsourced IT support desks, cloud delivery and infrastructure hosting, SaaS, and network and security monitoring are just a few. However, driving these service providers to jointly deliver a successful end-to-end business outcome (happy end-user customers) is more of a challenge. And as multiple, adaptive service providers become the norm, the challenge increases.Average number of service providers by year

Consider the loan application scenario described in the image below (click to expand). It leverages multiple IT and business services. The customer is dissatisfied with the disjointed service and ineffective tools, the lack of customer intimacy, and the lack of knowledge the service rep has about the process. Individual providers may be meeting their individual SLAs, but the bank’s customer isn’t satisfied. The end-to-end service outcome is not being focused on, and the bank is probably losing business.

Loan application - positive and negative scenarios

To avoid this scenario someone must take ownership and drive the customer experience and business outcomes across the multiple service providers.

Why is it so hard?

Whatever they are delivering, providers have their strengths and weaknesses. That is the reason we typically select them for their ‘best of breed’ performance in a specific area, and then ‘team’ them with our own internal people and other providers. After all, isn’t that why we’re getting them to deliver a particular function, rather than doing it all internally?

I have seen examples where it is possible for the entire series of arrangements to be demonstrably working like clockwork – only for the result to be woefully far off the mark. Some of the fundamental problems I have seen are:

  • No clear owner of the customer service – Often organisations absolve themselves from service delivery. Handing responsibility over to third parties can result in no one acting as the customer advocate and driving the end-to-end service delivery.
  • Providers work in silos – The individual providers are not aware of the full customer service and are not incentivised to support or collaborate with other providers to deliver the overall outcome.
  • Information is not shared – This hampers the smooth transition between discrete processes of the customer service, and provides no visibility on progress.
  • Lack of clarity in service definition – There is no common definition or understanding of the full service, discrete service components, agreed service measurements and who is responsible for what. Holding providers accountable for service delivery is difficult, and they cannot be managed consistently.
  • Lack of service flexibility – Providers have long term contracts that don’t encourage innovation, adaptation and continuous improvements to their service delivery when competition or customer expectations change.
  • Service provider apathy – Over time an organisation’s knowledge, IP and ownership of the business process becomes embedded in service providers, making it difficult to change service providers and creating a culture of complacency and apathy.
  • Misaligned cultures – Providers may have different approaches to customer engagement – not necessarily aligned with the organisation’s published philosophy and ethos.

Over the past decades we have thought long and hard about how to make this work for IT services, and that effort continues. The IT Service Management discipline is in the process of developing SIAM (Service Integration and Management) specifically to meet multi-sourcing challenges. And DXC’s own IDSM (Integrated Digital Service Management) model changes the service management focus to suit the digital era with DevOps and continuous delivery.

In part 2 – we will look at IT service management approaches I believe can be leveraged across business service providers too.


Michelle Hides

Michelle Hides is a Principal Consultant within Digital Transformation at DXC Technology. She focuses on business architecture, business value chains, process analysis and redesign, and the delivery of complex integration projects. With 30 years in the IT industry, she has worked in the Utilities, Insurance, Transport, Mining, Manufacturing, Telecommunications, Financial Markets, Health, Federal Government and Defence industries.

 

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  1. […] part one of this blog series, I looked at some of the fundamental problems of managing multiple service providers. However, to keep up with customer demand and expectations, employing a number of third-party […]

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